Comments on Session 10 - Straw Proposal on Auction Efficiency and Revenue Adequacy

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

The Alliance for Retail Energy Markets (“AReM”) understands CAISO’s desire to take a phased approach to implementation. Prioritizing a “Phase 1” will allow CAISO to implement improvements ahead of the Congestion Revenue Rights (“CRR”) annual auction in October. AReM recommends limiting Phase 1 to improvements with broad stakeholder support that can be implemented quickly. Such “quick win” solutions are natural fits for Phase 1.

However, based on the feedback during the call held June 2, the proposal to implement CRR price and bid floors does not have broad stakeholder support. Therefore, AReM does not support implementing this within Phase 1. See further comments below in response to Question 2.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

AReM opposes implementing this proposal within Phase 1. As discussed above, AReM supports limiting Phase 1 to quick win solutions with broad stakeholder support. Given the amount of discussion on the June 2 call, stakeholders have many concerns about this proposal. They also made several implementation suggestions that CAISO indicated would have to be implemented within Phase 2. If it will take more time to implement this proposal in a way to gain broad stakeholder support, it is best left to Phase 2.

If CAISO proceeds to implement this proposal within Phase 1, CAISO should be prepared to track the price and bid floor performance in addressing revenue sufficiency and auction efficiency after the October auction. CAISO should prepare an analysis of how the proposal performed against the questions CAISO presented on slide 13 of the June 2 slide deck. Based on this performance, CAISO should be prepared to adjust this proposal within Phase 2.

As to the appropriate price floor level, AReM takes no position at this time. AReM notes that the presentation states that excess auction payouts are not concentrated in a specific price range (slides 24-25). This makes it difficult to set a price floor. Again, AReM recommends the best approach is to take more time before implementing this proposal.  

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

This proposal would add modeling improvements including loop flow modeling to the CRR process. AReM does not oppose this proposal. Based on CAISO’s presentation within the workshop, these proposals are straightforward improvements and, therefore, should have stakeholder support. If so, these would be quick win type solutions appropriate for Phase 1 implementation.  

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

AReM has no further comments at this time. 

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

AReM has no further comments at this time. 

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

The Bay Area Municipal Transmission group (BAMx[1]) thanks the CAISO for the effort in preparing the June 2, 2026, Congestion Revenue Rights Enhancements presentation and associated straw proposal, dated June 1, 2026. BAMx understands the CAISO’s desire to implement a short-term reform to the CRR market before the 2027 annual process and does not oppose a phased approach in principle. However, we are concerned that implementing a short-term fix as part of the proposed Phase 1 reforms, particularly one limited to a bid and price floor, might take away from momentum to develop robust reforms to the CRR process that conclusively address revenue inadequacy that stems from the CRR auction. A bid and price floor is a reasonable short-term fix but only addresses part of the issue with the CRR auction. 

We believe stakeholders’ and the CAISO’s time is better spent developing comprehensive reforms to the CRR auction, such as limitations on participation or the willing seller-willing buyer auction. Therefore, BAMx respectfully requests that the CAISO move directly to developing the improvements discussed for Phase 2. If CAISO chooses to move forward with Phase 1, BAMx respectfully requests that the CAISO commits to develop structural auction reforms in Phase 2 immediately, including consideration of participation limitations, without waiting for implementation of Phase 1 changes. Phase 1 measures should complement, not substitute for, fundamental reform.

[1] The Bay Area Municipal Transmission group (BAMx) consists of the City of Santa Clara dba Silicon Valley Power and the City of Palo Alto Utilities

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

BAMx believes that its proposal to limit auction participation to those entities that have historically used the CAISO’s physical transmission system would be simpler to implement than the bid and price floor in the straw proposal. The CAISO and DMM already possess the information necessary to apply such limits, and similar limits already placed on allocation CRRs can guide the development of participant limitations for auction CRRs. This approach directly addresses the CRR working group Problem Statements 1, 2, and 5, related to auction revenue adequacy, participant contribution to fair allocation of congestion revenues, and addressing evolving hedging needs for users of the transmission system.[1]

Another viable short-term alternative raised in the stakeholder process might be to allocate auction-driven revenue shortfalls exclusively to the entities that do not use physical transmission in the CAISO and therefore are not using CRRs for FERC’s anticipated purposes: to hedge physical energy or to return congestion revenue to transmission ratepayers. 

Though BAMx considers the bid-price proposal to be a less direct measure than our proposal to limit auction participation and could divert attention from more effective solutions, we would like to offer our analysis of the bid-price bounds proposed by the CAISO and discuss some suggestions regarding the structure of the price bounds proposal.

Symmetrical Price Bounds

BAMx is concerned that the lack of symmetry in positive and negative price bounds could provide an opportunity for parties to thwart the intent of the bounds or create unintended consequences. Specifically, the CAISO proposes a -$0.10/MWh ceiling for negatively priced CRRs but floors of $0.25–$1.00/MWh for positively priced on-peak CRRs.[2] This asymmetry could create incentives for auction participants to use counterflow bids strategically to drive clearing prices below the bid floor on prevailing-flow paths, effectively circumventing the floor on positive-value CRRs. Perhaps the proposed price floor would effectively override such efforts, as suggested during the MSC discussion on June 11, 2026. BAMx recommends that the CAISO evaluate whether symmetric positive and negative bounds would better prevent such outcomes.

Backstop Mechanism

Because the root of revenue insufficiency seems to be both the low price and excessive quantity of CRRs released by the CAISO in the CRR auction, the bid-price floor construct should be designed only to restrict the CAISO from releasing too many CRRs at too low of a price. The bid-price floor should not apply to CRRs sold by entities that received them in the allocation or auction processes. CAISO CRR staff indicated during the June 11, 2026, MSC meeting that it should be feasible to not apply the bid-price floor to those transactions. In an efficient market, entities that already hold revenue rights should be able to sell them for whatever price they are willing to accept for those rights. Limiting entities’ ability to sell their own CRRs for any price they are willing to accept risks bringing the liquidity concerns raised by other entities to fruition. 

On that note, based on the pricing analysis discussed below, BAMx does not believe that any of the pricing groups proposed by the CAISO would meaningfully limit entities’ ability to sell their CRRs at auction. There is substantial auction activity remaining at levels above the bid-price limits proposed by the CAISO, and financial and marketing entities are still major participants at those levels. As demonstrated below, the limits proposed by the CAISO will put limits on the ability to gain windfall profits from cheap CRRs that consistently yield positive notional values while preserving LSEs ability to sell allocation CRRs to rebalance their portfolios. 

Pricing Analysis

If CAISO chooses to move forward with the bid and price floor structure from the straw proposal, BAMx recommends setting the auction bid and price floor at group 3, or $1.00/MWh for on-peak CRRs and $0.25/MWh for off-peak CRRs. Based on our analysis of 2024 CRR auction clearing data, and a variety of bid and price floors, including those proposed by the CAISO, we believe that the third group of prices proposed by the CAISO is the optimal level. Table 1 shows the bid-price floors tested by BAMx in the following analysis. 

Table 1: Bid-Price Groups for CRR Buy Transactions

BAMx used the entity-level CRR auction clearing data from our 2025 CRR analysis[3] and assigned the CAISO Department of Market Monitoring’s entity-type designations to the entities associated with each CRR observation. We then converted the price per MW to price per MWh by dividing the CRR buy MW quantity by the hours in each monthly time-of-use period. Next, we assigned a variable to each CRR observation indicating whether it would have cleared at each of the various pricing bands shown in Table 1.[4]

BAMx aggregated the 2024 CRR auction results to the monthly TOU level and determined the number of observations (N), the total buy MW, the total buy cost, and the notional value before clawbacks. Relative to the baseline, we calculated the proportion of CRR observations, buy MW, buy cost, and notional value that would have cleared or not cleared under each price group.

Table 2: Annual 2024 CRRs "Cleared" by TOU Bid-Price Group

Table 3: Monthly 2024 CRRs "Cleared" by TOU and Bid-Price Group

Table 2 and Table 3 show these summaries at the annual and monthly time-of-use level, respectively, by bid-price group. In each of these tables, the “_Pct” columns show the proportion of CRR observations, buy MW, buy cost, and notional value that clear for each price group. A substantial volume of CRRs exists below each of the three bid-price groups proposed by the CAISO. Under groups 1 and 2, around 20% - 30% of transactions and volume are excluded but roughly 97% - 99% of the total auction buy cost (representing perceived value to the auction buyers) is preserved. Groups 1 and 2 both represent a negligible share of the cost paid for auction CRRs but a meaningful share of the notional value paid out to CRR holders. Group 3 seems to strike something of a balance, where the reduction to costs paid is broadly similar to the reduction in notional value (i.e., while there is an approximately 40% reduction in transactions and MW volume, there is an approximately 10% reduction in buy cost and notional value realized). 

BAMx estimates that CRRs excluded under Group 3 contributed a net excess of approximately $20.9 million in payouts over auction revenue in 2024, representing roughly 18% of the CAISO's reported average annual shortfall of $114 million. This confirms that these low-price CRRs are not merely low-value, rather they are net contributors to revenue inadequacy. Relative to the low buy cost value, the contribution to revenue inadequacy is much more significant than the contribution from higher valued auction CRRs. The analysis shows that the Group 3 bid-price floors result in 40% - 50% of the auction MW being removed from the auction while preserving 85% of overall buy cost and notional value. Moving past group 3, the improvement to revenue adequacy diminishes.

This demonstrates that a substantial number of CRRs are being sold for prices that are systematically lower than their realized value and that a remedy is warranted. Transmission-use-based participation restrictions, a method to allocate underfunding to the entities that are driving the underfunding, or bid-price floor are all short-term modifications to the CRR auction process that might suit this need. 

The impact of these changes is not uniform across entity types. It appears entities that have no evident use of CAISO’s transmission system in 2024 EQR data have consistently extracted value from CAISO transmission ratepayers by taking speculative positions on these cheap CRRs with notional values that regularly exceed their buy cost. 

 Table 4: Aggregate 2024 Baseline CRRs by Entity Type

Table 4 above shows the baseline of CRRs that cleared in the 2024 auction. What is immediately evident from the baseline is that financial entities, who typically do not actually use the physical transmission system in CAISO[5], receive disproportionate notional value from their participation in the 2024 CRR auctions compared to their spending on auction CRRs. This arises from financial entities consistently purchasing low or negatively priced CRRs that subsequently realize significantly higher notional value. This pattern is consistent with speculative arbitrage, not physical hedging. 

Table 5: Aggregate 2024 "Not-Cleared" CRRs by Entity Type and Bid-Price Group

This pattern is also evident in the CRRs that would be excluded under each of the bid-price groups. Table 5 shows the CRRs that would not clear with of the five bid-price groups, aggregated by the entity types defined by DMM. The second row (Group1-FIN) shows that there were approximately 17,150 source-sink pairs representing 98,500 MW of capacity, $1,264,000 total cost, and $8,295,000 notional value purchased by financial entities in the 2024 auction that would be excluded by the group 1 bid-price bounds. This represents an approximately $7 million contribution to revenue inadequacy in the 2024 auction from entities with no identifiable use of the physical CAISO transmission system. This grows to approximately $19 million with the group 3 price bounds. 

Figure 1: "Cleared" CRR Buy MW by Entity Type and Group in 2024

Figure 1 shows the MW that “clear” under each of the price groups and demonstrate once again that most of the combined annual and monthly auction CRRs that do not clear under these price bounds are ones held by financial entities that do not have identifiable use of the CAISO transmission system in 2024 EQR data. Volume purchased by physical generators and load serving entities shows little change under any of the bid-price groups, because these entities are paying for hedges for their load or generation and, in the case of investor-owned utility LSEs, are prohibited from engaging in speculative activity. 

The data in Table 5 and Figure 1 also demonstrate that the CRRs that would be eliminated under the Group 1-3 bid-price floors are not serving the purposes of financial transmission rights identified by FERC. They extract value from transmission ratepayers rather than returning congestion revenue to transmission ratepayers. 

By comparing the price paid for CRRs to the notional value of the CRR, BAMx estimated the contribution of each entity’s source-sink pairs on revenue adequacy. We then collected the set of CRRs that would be excluded under each of the five bid-price groupings and assessed the extent that those CRRs contribute to underfunding from the buy-side of the 2024 CRR auction. 

Figure 2: Contribution to Revenue Inadequacy by Type and Bid-Price Group in 2024

Figure 2 demonstrates that eliminating these cheap, speculative CRRs will yield improvements to revenue adequacy that are larger than the corresponding reduction in CRR auction buy costs. Purchases of these low-cost CRRs contribute a substantial and disproportionate amount to revenue inadequacy in the CRR auction. Interestingly, at group 3, marketer entities see little net impact because roughly half of the CRRs purchased by marketer entities in group 3 ended up settling for negative notional values.

BAMx also evaluated the potential impact on sell-side outcomes from the -$0.10 proposed price floor for negatively priced transactions. We found that most of the impact is limited to sales of off-peak CRRs with fairly muted impact to sales of on-peak CRRs. Ninety-eight percent of annual peak CRR sales remain, along with 86% of annual off-peak sales, 96% of monthly peak sales, and 87% of off-peak CRR sales. 

Table 6: Sales of Annual CRRs by Bid-Price and Type for 2024

Table 7: Sales of Monthly CRRs by Bid-Price and Type for 2024

Table 6 and Table 7 show the fairly limited impact that the negative price bound has on sales of previously allocated or purchased CRRs, particularly to on-peak CRRs. It’s also apparent from these tables that many of the low-priced CRRs being sold at auction end up yielding positive notional value. This suggests that entities that are selling these low-priced CRRs would be financially better off if they kept them instead. That pattern is different for financial entities selling monthly CRRs, who appear to be selling CRRs that will ultimately reduce the total rents that they are able to extract from CAISO transmission ratepayers. This pattern is once again consistent with entities that are using CRRs other than as a hedge for physical transmission. 

Our analysis reveals a fundamental flaw in the current CRR auction process. CRR volume is being released into the CRR auction at prices that are consistently lower than their notional values. This suggests that the CAISO CRR auction is systematically undervaluing the CRRs that are being released into the auction, and it is releasing substantially more volume than is justified by actual hedging needs. This results in a systematic transfer of value from transmission ratepayers to the entities that are purchasing those undervalued CRRs. This finding is inconsistent with assertions that low-price CRR transactions do not disproportionately contribute to auction revenue shortfalls. While excess payouts may not be concentrated in a single price category on a per-MWh basis, they are disproportionately concentrated in volume at the lowest price levels. This is exactly the pattern a bid and price floor is designed to address.

Based on this analysis, BAMx suggests that if a bid-price floor is ultimately adopted by CAISO, the bounds should be set near those from group 3: $1.00/MWh for on-peak CRR purchases and $0.25/MWh for off-peak CRR prices. Given concerns expressed by stakeholders about unintended consequences, and the relatively small impact on auction inefficiency and revenue adequacy of the bid-price floor, BAMx recommends not pursuing the bid-price floor approach and instead pivoting immediately to Phase 2 to focus on more effective solutions to addressing the CRR auction problems. While potentially useful as an incremental measure, the bid-price floor mechanism does not address the fundamental structural issue that the CAISO releases excessive CRR volume at prices that systematically undervalue congestion rents. BAMx's preferred reforms for Phase 2 remain (1) participation limitations aligned with historical transmission use, and (2) continued development of the willing seller design. BAMx urges the CAISO to prioritize these structural reforms in Phase 2 regardless of the outcome of Phase 1.

[1] CAISO Straw Proposal, June 1, 2026, p. 6.

[2] CAISO Straw Proposal, June 1, 2026, p. 18.

[3] Bay Area Municipal Transmission Group (BAMx), “Analysis of CRR Auction Participation,” May 12, 2025. https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-BAMX-Congestion-Revenue-Rights-Enhancements-May-12-2025.pdf

[4] In principle, auction participants would change their behavior in response to these bid-price floors. This analysis is unable to capture that nuance without re-running a simulated CRR auction for 2024. 

[5] Bay Area Municipal Transmission Group (BAMx), “Analysis of CRR Auction Participation,” May 12, 2025. https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-BAMX-Congestion-Revenue-Rights-Enhancements-May-12-2025.pdf

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

BAMx supports modeling enhancements that target improved loop flow representation in the CRR process. 

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

The expansion of the Global Derate Factor (GDF) to contingency constraints starting in March 2026 has dramatically reduced the hedging value of these CRRs in each month since the expansion. This change slightly improved CRR revenue adequacy in March[1] compared with the previous months, but as the Market Performance and Planning Forum Q2 presentation demonstrates, it is not meaningfully different than November 2025 – February 2026[2] before this change was made. The marginal improvement in March 2026 seems to have come from the reduction in hedging value to allocation CRRs. This does not seem like the CAISO’s intended outcome. Extracting additional value from allocation CRRs and reducing their hedging ability runs contrary to both of the FERC-approved uses for financial revenue rights: returning congestion revenue to transmission ratepayers and serving as the financial equivalent of firm transmission.

Allocation CRRs have consistently been fully funded but shortfalls in auction CRRs have been the driver of revenue inadequacy. DMM's May 12, 2025 analysis demonstrated that allocated CRRs have been fully funded in 16 of 19 quarters from Q3 2020 through Q1 2025, with allocated CRR notional value averaging a surplus of about 17% of congestion rent.^[3] After the auction, however, CRR revenue adequacy had shortfalls of about 25% of congestion rent.^[4]  We understand the appeal of expanding the GDF to contingency constraints, but BAMx feels that the CAISO should consider reducing the current level of the GDF, given the increased number of constraints to which the GDF applies and the resulting significant reduction in CRRs. BAMx requests that the CAISO separately report on the impact of the expanded GDF application on allocated CRR volumes by LSE category and evaluate whether allocation SFT assumptions can be calibrated independently of auction feasibility considerations. Without auction reform, the burden of addressing underfunding is falling disproportionately on allocated CRR holders, thwarting the purpose of the CRRs.

[1] CAISO, “Market Performance and Planning Forum Q2,” April 27, 2026, p.48

[2] Id, p. 53

[3] Roger Avalos, CAISO Department of Market Monitoring, “Congestion revenue rights auction is fundamentally flawed – and continues to lose millions of dollars a year,” May 12, 2025, p.3. https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-CRR-Enhancements-May-12-2025.pdf

[4] Id, p. 10.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

 No comments at this time.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

BETM supports a phased approach to this initiative but does not support the inclusion of an auction bid and market price floor at this time.  With the 2027 annual auction process already underway proposing and implementing such a major change within a 60-day stakeholder process seems rushed and unwise.  Rather, phase 1 should remain focused on measures directly causing underfunding such a modeling and loop flows.  For example, in early May we say ITC underfunding 50X the notional value of the CRR.  What caused this?  Why hasn’t the ISO provided response to multiple stakeholder inquiries?  Would the ISO expect CRR participants to bid 100% of expected value when on certain days the CRR holder could get hit with 50X+ underfunding?  This is a perfect example of the issues the ISO should focus on in phase 1. 

Regarding implementing a bid floor.  This idea needs more stakeholder discussion and data from the ISO.  Are CRRs priced at low levels in the auction the cause of the auction inefficiency?  If so can the ISO provide paths where this is consistently happening?  Also, what are the implications of this change to the CRRs that go unsold?  Will any congestion rents be used to offset underfunding or be added to the CRR balancing account for the benefit of load only. 

BETM does not understand why CAISO has placed an expedited timeline on this newly introduced proposal rather than continuing to advance other established enhancements.

Further, we need more time and information on whether we would support a bid/price floor, but we certainly do not support such a major change so close to an annual auction. 

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

BETM does not support moving forward with the proposed minimum bid ad market clearing price floors in Phase 1.  With the 2027 auction quickly approaching this idea needs more data and stakeholder discussion before it is ready for a final proposal/board discussion.

One specific area that needs significant stakeholder discussion is where would CRR congestion rents from unsold CRRs go?  One possible solution would be to offset underfunding.  BETM was disappointed in the ISO’s statement that they wanted to avoid making additional tariff changes regarding the underfunding rules as part of phase 1. 

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

BETM supports CAISO continuing to pursue modeling enhancements that improve alignment between the CRR model and Day-Ahead Market outcomes. To this end, we ask the ISO to provide stakeholders with explanations to the significant underfunding level seen in early may of certain ITC constraints.  Would a price floor/cap have addressed the massive underfunding levels?

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

As stated previously implementing a bid and price floor at this time, so close to a annual CRR auction, is unwise and should not be considered by the ISO. 

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

No additional comments at this time. 

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

The California Community Choice Association (CalCCA) appreciates the opportunity to comment on the California Independent System Operator (CAISO) Congestion Revenue Rights (CRR) Enhancements Straw Proposal. In this initiative, the CAISO should answer questions about the product definition, including time of use periods, as soon as practicable to assist load-serving entities (LSE) in hedging a changing portfolio production shape, grid flows, and congestion exposure. However, this process will require tariff changes and potentially significant changes to the allocation and auction process, which are unlikely achievable in time for the 2027 CRR process. The CAISO should therefore commit to addressing product definition so that changes can be implemented for the 2028 CRR process.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

It is premature to opine on CAISO’s proposed method for setting a bid and price floor in the CRR auction because the CAISO’s proposal would apply the floor to all CRRs whether those CRRs are sold by the CAISO or by an LSE adjusting a position obtained in the allocation process. The CAISO proposes the floor as a potential solution to the revenue adequacy problems associated with auctioning unallocated, but still simultaneously feasible, source-sink pairs at any bid price. These problems are not the result of LSEs selling CRRs obtained in the allocation. LSE CRR sales do not impact the total revenue adequacy of the CRR auction because the auction revenues accrue to the selling LSE, and the source-sink pairs are limited to generating and import sources and sinking at load. LSE-owners of allocated CRRs should have the right to determine the price they are willing to accept for their allocated CRRs.

The CAISO must first answer the following questions before instituting a bid and/or price floor:

1.     Can the CAISO apply the price floor only to CRRs that are being sold from unallocated source and sink pairs that are simultaneously feasible, while continuing to allow LSEs to bid to sell an LSE-allocated CRR to serve as its own floor?

2.     The CAISO should provide the following data on the price floor levels, proposed on page 18 of the Straw Proposal and page 28 of the presentation:

a.     If the floor prices had been implemented for the 2025 CRR process, what quantity of CRRs that were offered for sale by an LSE would and would not have cleared for each level of price floor?

b.     Of the CRRs offered by an LSE for sale that would not have cleared, what was the total notional value of those CRRs based on the LSE offer price for each level of price floor?

c.     If the floor prices were in place for the 2025 CRR process, how much would revenue inadequacy have improved for each level of price floor?

While, in theory, CRRs held by an LSE from a prior allocation process should be sold at the LSE's bid price, answering these questions will help determine whether, in practice, the floor price is likely to bind. In addition, it is important to understand whether the proposed floor level will have an appreciable impact on the revenue inadequacy experienced prior to taking a formal position on the floor. 

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

The proposed elements on slide 31 should be adopted within phase 1.  While it is not possible to model the grid with complete precision for the CRR process since the grid configuration in operation will change for unforeseen reasons, the CAISO should not ignore known grid flows including loop flow considerations. 

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

CalCCA has no comments at this time. 

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

CalCCA has no comments at this time. 

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

The California Energy Storage Alliance (CESA) appreciates the opportunity to comment on the Straw Proposal on Auction Efficiency and Revenue Adequacy. As noted below, CESA recommends that changes to the CRR auction be moved from Phase 1 to a subsequent phase of the CRR Efficiency and Revenue Adequacy initiative.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

CESA believes it is premature for CAISO to publish a final proposal on June 30 to include a bid floor and price floor in the CRR auction. Given the discussions on the working group call and at the June 11^th Market Surveillance Committee, it is unclear if the proposed changes will positively address auction inefficiency. The data do not provide conclusive evidence that low priced CRRs are correlated with excessive payments above the expected CRR value. In addition, there is very limited documentation on how bid floors/price floors would be implemented for buy/sell offers in the simultaneous feasibility test. Absent additional documentation, it is unclear how CRR prices will be determined in the auction. Lastly, the implementation of bid/price floors could create new issues, such as not allowing willing sales of allocated CRRs, that prevent market participants’ ability to meet their physical hedging requirements.

CESA recommends CAISO remove the auction changes from Phase 1 and perform additional analysis to empirically establish that auction clearing prices are correlated with auction inefficiency. For example, slide 25 should be updated to show the net payment to CRR holders after CRR1B underfunding claw backs. In addition, the CAISO should evaluate the extent to which price floors/bid floors are effective in addressing auction inefficiency by rerunning prior auctions with the proposed floors.  

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

CESA supports improved modeling of loop flows in the annual CRR process.  

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

No additional comments. 

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

No additional comments. 

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

Comments on Congestion Revenue Rights Enhancements

Straw Proposal on Auction Efficiency and Revenue Adequacy

Department of Market Monitoring

June 16, 2026

Summary

The Department of Market Monitoring (DMM) appreciates the opportunity to comment on the Congestion Revenue Rights Enhancements Straw Proposal on Auction Efficiency and Revenue Adequacy.[1]  These comments also include some data on congestion revenue rights that address questions raised on the ISO’s proposal at the Market Surveillance Committee (MSC) meeting on June 12.

DMM does not believe that a single uniform reserve price for flow and one for counterflow congestion revenue rights (CRRs) will address the design flaws inherent in the CRR auction design. This approach could be significantly improved by creating path-specific reserve prices, although some concerns raised by stakeholders may persist with any approach based on path-specific reserve prices while maintaining an auction based on a transmission model.

A more effective and efficient way to implement reserve prices would be to put the reserve prices on the specific constraints enforced in the auction, rather than on all possible source-to-sink paths available in the auction. This constraint-based approach could allow reserve prices to be aligned with the underlying value and cost of the different CRRs the ISO offers in the auction, eliminate the concerns over restricting trades between willing counterparties, eliminate different prices for flow and counterflow across a path, and likely reduce transmission ratepayer losses in the auction.

While offering products at reserve prices with some relation to the costs of selling the product is a significant improvement over offering them below cost at $0, DMM is still highly skeptical that the ISO needs to intervene in the market to offer these contracts at all. And if intervention is desired, it should be targeted and limited to achieving the underlying purpose of intervening which is facilitating hedging in the ISO energy market. Therefore, DMM continues to recommend that the ISO develop a CRR auction design based on willing sellers, and that development of such an approach be the top priority for the congestion revenue rights enhancements initiative.

Comments on Straw Proposal

Path-specific reserve prices could more closely align with the costs than a single uniform reserve price

DMM continues to believe that it is not appropriate for the ISO to sell CRR products that clearly impose costs on transmission ratepayers with a zero dollar offer price. Setting a single reserve price for flow CRRs and a single reserve price for counterflow CRRs, as described by the ISO in the straw proposal, cannot represent the value or costs of all the various CRRs offered by the ISO, whose cost and value vary significantly. While this may be better than zero dollar offer prices, such a blunt reserve price seems unlikely to be very effective and would be susceptible to adverse selection.

Expanding the ISO’s methodology from a single auction-wide price to path-specific prices would more closely align the minimum bid/reserve prices with the underlying value and cost of different CRR paths. This could reduce the adverse selection problems of a single reserve price (for flow CRRs) but some of the other concerns that stakeholders raised could persist. These concerns include (1) auction participants willing to trade with each other being unable to trade because their bids do not meet the minimum bid requirement and (2) prices for a CRR path in the flow direction being different than the counterflow direction.

Constraint-specific reserve prices 

The concerns raised by stakeholders on the minimum bid/reserve price proposed by the ISO stem from the minimum price being applied to CRR source-to-sink paths while the actual products the ISO is offering into the auction are for specific constraints.

The products in the auction are defined by the constraints, the product prices are the constraint shadow prices, and the amount offered by the ISO is the constraint limit.[2] The source-to-sink CRR paths are a bundle of these products and the marginal costs of congestion (MCCs) are the bundled price of the underlying products—some of which could be purchased from the ISO through the constraint limits and some that could be purchased from other auction participants.

Placing the minimum price on the CRR path does not align with the constraint limits, which are the constraint defined products that the ISO offers in the auction. For example, a participant could bid to buy a CRR sourcing from A to B that is bought in full from another participant offering a CRR from B to A—without using any product purchased from the ISO. Placing a minimum bid price on this path would affect at what price the two participants can trade without being a reserve price on anything the ISO sold.

Removing this misalignment by placing reserve prices on the specific constraints being offered would be a much more efficient and effective way to implement reserve prices. Constraint-specific reserve prices would:

• align with the product that the ISO offers in the auction (the constraint limits),
• not restrict what bid prices auction participants could submit,
• allow trades between market participants even if their bids are below the reserve price,
• not create a mismatch between path flow and counterflow prices,
• significantly reduce adverse selection problems,
• likely reduce transmission ratepayer losses in the CRR auction, and
• provide all entities the ability to procure CRRs being used as hedged at a reasonable cost that reflect the expected value of these hedges

The ISO could implement constraint-specific reserve prices similar to how it relaxes constraints for penalty prices in the energy markets. For each constraint, there could be a relaxation resource (R) that only provides counterflow to one constraint. The relaxation resource R would enter the objective function as a choice variable with a bid equal to the reserve price (r) and a max bid quantity equal to the constraint limit. The constraint limit would then be set to zero. In this way, the ISO is still offering to sell up to the constraint limit but only if the reserve price is met.

As an example, consider a constraint with a 100 MW limit. The ISO calculates a reserve price of $2 per MW. The current auction would model:

Where bid quantities () and price () are submitted by market participants and the shift factors () map the bids to constraint flows.

Implementing the constraint-specific reserve price would change the model to:

Thus, the ISO still offers 100 MW of constraint k “capacity” but at a reserve price of $2 rather than $0.

A simple way that the ISO could calculate constraint-specific reserve prices would be to take the average—or some percentile—of historical prices, adjust for energy price changes (using prices from energy forward contracts for example), and potentially add a risk premium.[3]

Analysis of different bid/price limits

At the June 12 MSC meeting, there appeared to be a strong consensus that if the ISO is going to continue to consider an approach based on uniform bid/price levels, more analysis is needed to assess the impact of different bid/price limits that might be used under the ISO’s proposed approach. The MSC outlined an approach based on re-running the CRR auction model with different bid/price levels and assumptions.

If the ISO is going to continue to consider an approach based on uniform bid/price levels, DMM suggests that the ISO can leverage the data they have apparently already assembled to get a better understanding of how effective various minimum prices might be at reducing auction losses. The method described below uses existing data and does not account for all the changes in bidding and auction outcomes that implementing minimum prices could cause. Nor does this approach measure ratepayer losses directly. However, this relatively simple approach with existing data could provide a much better understanding of how various minimum prices could affect ratepayer losses.

Using the data already collected, the ISO could:

1. Take a data set that has the following for each positively priced CRR:
   1. CRR source/sink
   2. MW clearing auction
   3. Auction price
   4. Congestion revenues from CRR
   5. Net revenues (auction revenues – congestion payments)
2. Sort the CRRs by auction price (ascending).
3. Calculate the cumulative sum of net revenues/losses for all positively priced CRRs (based on order after sorting in ascending order of price).
4. The resulting data set would be an x-y chart of cumulative net CRR revenues/losses (x-axis) and CRR price (y-axis).
5. If the ISO picks any price on y-axis as the “minimum clearing price” and draws a horizontal line, this would intersect at the amount of losses from CRRs sold under that price. This could be viewed as a ballpark upper bookend of potential reduction in losses from any given minimum clearing price.
6. A variation of this simplified method could be to assume that all CRRs that cleared under any given minimum clearing price cleared at that minimum price. For this, the ISO would need to re-calculate the net revenues/losses, assuming CRRs that cleared at prices less than this minimum price instead cleared at this minimum clearing price.
7. A third variation could be to assume that only CRRs that cleared at prices less than this minimum price would clear if they were still profitable for buyers at this new minimum price.

While not perfect, data analysis such as this could provide a better understanding into how different minimum prices might affect auction losses.

Comments on MSC Meeting

The following sections provide data that address several questions raised on the ISO’s proposal at the Market Surveillance Committee (MSC) meeting on June 12.

Allocated CRRs are revenue adequate

One question that arose at the June 12 MSC meeting was how much additional transmission capacity was actually available in the auction after accounting for CRRs allocated to load serving entities (LSEs). While the ISO has not released data on this question in terms of transmission capacity, this issue can be addressed by examining congestion revenues that are generated in the day-ahead market relative to congestion revenues that would be needed to fully fund allocated versus auctioned CRRs.

Figure 1 compares total day-ahead congestion revenues to the notational value of all CRRs allocated to LSEs by quarter since Q3 2020. These notational values include congestion revenues that would be needed to fully fund allocated CRRs that were sold by LSEs in the auction. As shown in Figure 2, LSEs have consistently sold about one fourth (24 percent) of allocated CRRs (as measured by the notational value of CRRs) in the auction.

As shown in Figure 1, since Q3 2020 total day-ahead congestion revenues have exceeded the notional value of all allocated CRRs over most quarters with an average surplus of about 16 percent since Q3 2020. On an annual basis, congestion revenues have exceeded the nominal value of all allocated CRRs each year since 2020.[4]

These data show that when CRRs sold in the auction are viewed on an incremental basis, these CRRs account for all of the overall revenue inadequacy and most or all deficit offsets incurred by both LSEs and non-LSEs. If CRRs were not sold by the ISO at a loss, then revenues would be adequate to fully fund allocated CRRs without the need for any deficit offsets.

Figure 1. Allocated CRRs have been revenue adequate overall

Figure 2. LSEs sell about one-fourth of allocated CRRs in the auction

Deficit offsets

Another question that arose at the June 12 MSC meeting was the extent to which financial entities may disproportionately contribute to deficit offsets by targeting CRRs associated with transmission constraints that tend to be most revenue inadequate. DMM believes that there is some evidence of this based on DMM’s calculations of deficit offsets by participant type, as summarized below:

• Revenue inadequacy deficit offsets for load serving entities and generators have been about 25 percent of the notional value of their CRRs (the value of the CRRs if fully funded).
• Deficit offsets have been about 29 percent of notional value for marketers and 33 percent for financial entities.

This highlights that the CRRs procured by marketers and financial entities in the auction are creating more shortfalls than CRRs acquired by LSEs and generators. Marketers and financial entities account for about 27 percent and 63 percent of non-LSE notional auction revenues, respectively, for a total of about 91 percent. Thus, the CRRs acquired in the auction acquired by these entities are the primary driver of CRR revenue inadequacy.

[1]  Congestion Revenue Rights Enhancements Straw Proposal on Auction Efficiency and Revenue Adequacy, California ISO, June 1, 2026: https://stakeholdercenter.caiso.com/InitiativeDocuments/Straw-Proposal-Auction-Efficiency-Revenue-Adequacy-CRR-Enhancements-2026-06-01.pdf

[2]  Assuming the transmission models are the same between the auction and day-ahead markets. Because the models are not the same, the actual amount offered by the ISO can exceed the limit.

[3] The ISO could use a single relaxation resource per constraint contingency case combination, with reserve prices created specifically for that contingency case (allowing the reserve prices to stack, just as MCCs stack the shadow prices, which is appropriate with appropriate case-specific reserve prices). Alternatively, the ISO could use the same reserve price across all transmission contingencies and have the relaxation resource apply counterflow in all contingencies (such that the reserve prices do not stack across cases). When constraint limits are different across contingencies, then the relaxation resource can be broken out into multiple resources with the same reserve price and shift factors (SFs) set to release capacity across the different limits per continency. For example, if contingency cases a, b, and c have limits 10, 15, and 17 MW, then Ra would have bid max of 10 MW with SF=-1 for all cases, Rb would have bid max of 5 MW and SF=-1 for cases b and c, and Rc would have bid max of 2 MW and SF=-1 to only case c.

[4]  DMM does not have data on potential revenue adequacy on a constraint-by-constraint basis under a scenario that compares congestion revenues to the nominal allocated CRRs only (excluding CRRs sold by the ISO).

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

Please see the PDF attached below the final question for DMM's fully formatted complete set of comments. For the reader's convenience, the complete text of the comments is pasted in response to #1, but there may be some formatting errors.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

Calpine supports a phased approach to the CRR enhancements initiative but recommends that Phase 1 remain focused on the underlying drivers of CRR revenue inadequacy and weak auction performance, rather than introducing structural changes to auction price formation such as minimum bids or clearing price floors.

As noted in prior comments, subdued CRR auction prices are best understood as a reflection of payout uncertainty and modeling divergence, not a failure of the auction construct itself. Administrative pricing constraints do not increase congestion revenue or improve model alignment and therefore risk addressing symptoms rather than causes.

Phase 1 should instead prioritize a core set of foundational reforms needed to support a well-functioning CRR market, including improved outage reporting and modeling alignment, evaluation of the shift factor threshold, enhanced network and loop flow modeling, and reform of shortfall allocation. While each of these elements is important, none is sufficient on its own. A durable solution requires these reforms to work together, alongside improvements in liquidity, participation, and auction design.

Calpine also recommends that CAISO should provide a quantitative assessment of the primary drivers of CRR underfunding. Specifically, CAISO should publish a decomposition of historical shortfalls attributable to outage modeling differences, shift factor screening thresholds, loop flow treatments, unscheduled flow impacts, and network model divergence between the CRR and Day-ahead processes. Such analysis would help stakeholders prioritize reforms based on measured impact rather than perceived importance.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

Calpine does not support moving forward with bid or clearing price floors in Phase 1.

These floors would alter auction outcomes administratively without addressing the underlying drivers of CRR value, including congestion revenue, modeling accuracy, and payout certainty. As a result, they risk suppressing efficient transactions, reducing participation, weakening the secondary market, and distorting price signals for hedging and investment.

In our experience across CAISO and other organized markets, liquid markets with broad participation naturally compete away arbitrage opportunities and produce efficient prices. Imposing bidding constraints interferes with that process.

In addition, the proposal lacks sufficient analytical support. Before advancing the proposal, CAISO should provide robust back-cast analysis demonstrating the impacts on auction outcomes, revenue adequacy, and participant behavior.

Before implementing CRR bid or clearing price floors, CAISO should quantify the role of counterflow transactions in supporting CRR feasibility, auction liquidity and hedge availability. Counterflow positions often increase the quantity of simultaneously feasible CRRs that can be awarded. Any proposal that restricts these transactions should be supported by analysis demonstrating that the benefits of higher auction prices outweigh the potential reduction in hedge opportunities and market participation.  

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

Calpine supports continued efforts to improve alignment between the CRR model and Day-Ahead Market outcomes, including improved outage reporting, enhancements to loop flow and unscheduled flow modeling, and reevaluation of the shift factor threshold.

The shift factor threshold remains a critical and unresolved issue. The current exclusion of relatively small shift factors that affect CRR feasibility from the Day-Ahead market continues to drive underfunding and undermine confidence in CRR outcomes.

CAISO has not provided sufficient clarity on how it intends to address this issue. Calpine recommends that CAISO explicitly evaluate both adjusting the Day-Ahead shift factor threshold (for example, lowering it from current levels) and introducing a comparable threshold into the CRR model itself. Stakeholders cannot evaluate solutions to a known root cause without understanding the tradeoffs between these approaches.

Both options should be analyzed in parallel. Lowering the Day-Ahead threshold would better align congestion revenue formation with CRR awards, while applying a threshold in the CRR model would improve consistency and prevent CRRs from being released on flows unlikely to yield sufficient funding. These approaches are not mutually exclusive, and a combination may be necessary to eliminate the structural mismatch between CRR awards and Day-Ahead congestion outcomes.

If CAISO does not intend to pursue one or both of these approaches, it should clearly explain its rationale, quantify the impact of the current design on underfunding, and demonstrate how alternative measures would address this issue.

More broadly, these improvements are necessary building blocks but must be implemented alongside liquidity and allocation reforms to fully restore confidence in the CRR market.

In addition, Calpine recommends that CAISO explicitly evaluate the contribution of dynamic nomograms, branch group constraints, and other operationally managed transmission interfaces to CRR revenue inadequacy. Several of the most significant congestion drivers in CAISO are represented through dynamic operating limits that vary with the system conditions and may not be reflected consistently between the CRR feasibility determinations and Day-Ahead congestion revenue formation. To this extent, these constraints materially influence congestion rents, any divergence in representation can create structural uncertainty regarding CRR funding and hedge performance. CAISO should provide quantitative analysis of the contribution of these constraints to historical CRR shortfalls and evaluate whether the enhanced model alignment would improve revenue adequacy.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

Calpine continues to support enhancements that increase liquidity, participation, and price discovery, including the development of Balance of Planning Period (BoPP) auctions.

A more frequent auction structure would allow participants to adjust hedges as new information emerges, improve price discovery, and reduce risk premiums embedded in forward contracts. Combined with a robust secondary market, increased auction frequency supports competition that naturally eliminates arbitrage opportunities and improves overall efficiency.

A liquid secondary market is equally important. It allows participants to rebalance portfolios, exit positions when needed, and contribute to overall market depth. Restrictions that limit pricing flexibility, such as bid floors, risk impairing these essential functions.

At a fundamental level, efficient CRR price formation depends on liquidity, participation, and the ability to arbitrage price differences across auctions and the secondary market.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

Calpine continues to recommend reform of the current constraint-by-constraint shortfall allocation methodology. The existing design creates significant path-specific volatility, reduces confidence in CRR hedges, and discourages participation on affected paths. Moving toward a broader, portfolio-based allocation similar to approaches used in other regions would improve hedge reliability, reduce extreme outcomes, and support greater participation and liquidity. In turn, this would improve auction efficiency and outcomes for load.

Calpine emphasizes that several elements are all necessary components of a well-functioning CRR framework, including accurate outage modeling, appropriate shift factor treatment, sufficient auction frequency, robust secondary market liquidity, and improved shortfall allocation. Each addresses a different aspect of performance, but none is sufficient independently. Only when implemented together can these reforms reduce underfunding risk, strengthen price formation, and restore confidence in CRRs as reliable hedging instruments in CAISO.

Finally, CRR markets provide benefits beyond auction revenue metrics They support forward price signals, reduce risk premiums in bilateral and retail contracts, and enable longer-term procurement and investment decisions. Proposals that reduce liquidity or weaken hedge reliability risk undermine these broader benefits.

Calpine supports a comprehensive approach to CRR reform that strengthens revenue adequacy, liquidity, and price formation. For these reasons, Calpine recommends that CAISO prioritize root-cause modeling and revenue adequacy improvements, enhance liquidity through auction design improvements such as BoPP auctions, and reform shortfall allocation to improve hedge reliability, while deferring pricing interventions until these foundational elements are in place. Administrative measures such as bid or price floors, particularly when implemented in isolation, will risk distorting outcomes, and possibly even exacerbating underfunding, rather than resolving the underlying issues. CAISO should not attempt to expedite development of a price floor design for near-term implementation targeting the upcoming annual CRR auction, without first ensuring the proposal is fully developed, analyzed, and vetted through a robust stakeholder process.

A comprehensive proposal is more appropriate, and any changes should include an integrated set of reforms, each helpful but not sufficient alone, working together to support a liquid, efficient, and reliable CRR market.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

Energy Division staff (ED staff or staff) of the California Public Utilities Commission (CPUC) develops and administers energy policy and programs to serve the public interest, advises the CPUC, and ensures compliance with CPUC decisions and statutory mandates. ED staff provides objective and expert analyses that promote reliable, safe, and environmentally sound energy services at just and reasonable rates for the people of California.

ED staff appreciates the opportunity to submit comments on the straw proposal covering auction efficiency and revenue adequacy. ED staff is supportive of the straw proposal as published on June 1^st and presented on June 2^nd, as the straw proposal largely matches the intent of ED staff comments submitted on May 5^th..[1]

ED staff thanks CAISO for prioritizing auction efficiency and revenue adequacy, rather than introducing new products or time of use periods in Phase 1. ED staff agrees with CAISO’s prioritization because the CRR Market has cost ratepayers over $1 billion since 2012, according to the Department of Market Monitoring. ED staff is supportive of CAISO’s proposed phase auction to address immediate reforms in Phase 1, and more extensive reforms in Phase 2. Phase 1 reforms must be adopted and implemented quickly to mitigate the significant ratepayer costs resulting from auction inefficiency and revenue inadequacy  before the annual CRR auction commences in October 2026. Since the annual auction only runs once a year, if this is not adopted in time for October 2026, these reforms could not be implemented until October 2027. To the extent reforms from Phase 1 need to be finetuned, this effort could occur in Phase 2.

ED staff encourages CAISO to implement the proposed reforms in the straw proposal as quickly as possible, and for stakeholders and CAISO to analyze production quality data and for CAISO to commit to consider further refinements in Phase 2.

[1] California Public Utilities Commission, Energy Division Staff comments, May 5^th, 2026, April 2026 CRR Comments.pdf

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

ED staff thanks CAISO for considering a minimum bid and price floor in the CRR auction and agrees that this is an albeit imperfect improvement from the status quo. ED staff fundamentally believes CAISO should not be selling CRRs at $0 to entities that do not pay for the cost of the transmission grid. ED staff understands that addressing this problem is not as straightforward as simply disallowing these CRRs to clear at $0 due to how the power flow modeling works, thus necessitating a universal auction floor.  

ED staff recognizes that a uniform floor is a fairly blunt mechanism to address this problem that could hamper entities who wish to resell CRRs below the floor. However, any floor represents an incremental improvement because it would likely reduce  revenue adequacy and auction inefficiency. A minimum floor improves auction results by reducing the divergence between auction prices and notional value, thereby producing more accurate predictions of DAM congestion.  

ED staff supports using a higher value for preliminary implementation and modifying these floors as needed based on market results. For prevailing flow on peak CRRs, ED staff supports starting with a $1.00/MWh bid and price floor given that CAISO’s graphics and data analysis show that 50% to 65% of auction CRRs have a notional value higher than a $1.00/MWh floor. However, a $0.75/MWh floor also appears reasonable based on CAISO’s graphic from page 14, copied below, as a $0.75/MWh floor would be lower than the notional value of 70-80% of on-peak CRRs.[1]

Regarding prevailing flow off-peak CRRs, ED staff defers to CAISO to identify a specific minimum bid and price floor. However, a starting value around $0.15 to $0.25/MWh appears reasonable based on the data above. A floor of $0.25/MWh appears to be reasonable when considering Season 1 off-peak data, but appears too high for Seasons 2-4 because a floor of $0.25/MWh would be higher than the notional value of 50-60% of off-peak CRRs. ED staff supports CAISO’s recommendation for counterflow positions because a counterflow floor that is set too low could possibly incentivize or enable gaming opportunities.

ED staff recognizes that a minimum bid and price floor could deter some market participants who are unwilling to bid if their historical bidding willingness is below the proposed floors. This could cause a decrease in bid volume. However, the preservation of bid volume in and of itself is not the goal of this initiative. The objective is to increase auction efficiency by creating clearing prices that more closely resemble expected congestion in the DAM. ED staff encourages CAISO to first establish the authority to set minimum bids, prices, and floors in their tariff authority. The exact tuning of these floors could occur via the Business Practice Manual change process similar to the configurable parameters adopted as part of the Day-Ahead Market Enhancement products. As ED staff has stated, the initial values as implemented in Phase 1 are a fairly blunt mechanism. These Phase 1 values will not be perfect, and will require finetuning in Phase 2, but CAISO will have the ability to finetune these values if the required tariff changes needed to implement Phase 1 are approved by FERC. In addition, in the final proposal and tariff language, CAISO should preserve the ability to establish path or constraint specific minimum floors, which ED staff views as a more ideal long-term refinement of the minimum floor concept.

[1] Pg. 14, Congestion Revenue Rights Enhancements, Straw Proposal on Auction Efficiency and Revenue Adequacy, June 1^st, 2026, Straw-Proposal-Auction-Efficiency-Revenue-Adequacy-CRR-Enhancements-2026-06-01 (2).pdf  

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

ED staff supports expanded modeling to improve revenue adequacy because there are some revenue adequacy issues tied to the shift factor threshold (SFT) divergence between the DAM and CRR models. However, ED staff urges caution in modifying the DAM model SFT because this would likely increase the solving time for the DAM model – which is already becoming more complex as new EDAM BAAs join. Should CAISO pursue modifications to the DAM model for other reasons, then they should also seek to reduce the divergence between the SFT in DAM and CRR model, if possible.

ED staff appreciates that, at this time, CAISO is not proposing any modifications to the pro-rata payout reduction mechanism nor any revenue netting mechanisms.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

ED staff does not have extensive comments on this question as ED staff is not a commercial entity.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

ED staff encourages CAISO to consider the feasibility of an LSE override mechanism that only implicates the MW share of the CRRs allocated to the LSE wishing to resell part of its allocation. However, this override mechanism should not allow the LSE to override the minimum floor of the entire MW capacity of that CRR path/constraint. ED staff, during the working group meeting, proposed an LSE override mechanism as explained below. ED staff clarifies that creation of such a mechanism should be subsequent to the adoption and implementation of Phase 1 reforms:

“CPUC proposed a middle path which would implement a flat universal minimum for Phase 1, with an LSE-controlled override mechanism, where LSEs wishing to sell their allocated positions below the floor would affirmatively identify their sell price, thereby protecting resale transactions without bifurcating the auction design.

CAISO acknowledged this as potentially workable and indicated it would examine the implementation feasibility. A follow-up comment noted that care would be needed in the override mechanism design where if an LSE's low-priced sell offer sets the clearing price for all positions on that path (including those released by CAISO), the mechanism could undercut the floor's intended effect for a single small transaction.”[1]

ED staff encourages CAISO to explore this refinement in Phase 2. It does not appear viable to consider this refinement in Phase 1, and ED staff does not support delaying Phase 1 in order to craft this mechanism. ED staff supports the adoption of a universal floor immediately, and consideration of additional refinements in Phase 2.

ED staff also encourages CAISO to conduct further analysis on why the CRR auction is clearing more volume than the CAISO DAM itself. It is ED staff’s understanding, based on data discussed during the June 11^th Market Surveillance Committee meeting, that the CAISO DAM clears around 205 TWh, while the CRR Auction clears around 240 TWh.[2] If the CRR model is attempting to stretch congestion revenue collected based off 205 TWh to 240 TWh of CRR auction activity, then this could be producing some of the revenue inadequacy.

[1] Pg. 9, Customized Energy Solutions, CAISO Market Intelligence, subscriber only access.

[2] Slide 4, Bay Area Municipal Transmission Group, Analysis of CRR Auction Participation, May 12^th, 2025, Presentation-BAMX-Congestion-Revenue-Rights-Enhancements-May-12-2025 (5).pdf

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

In general, an incremental, phased approach to CRR enhancements would make sense; however, DC Energy has serious concerns with the proposed timeline for adopting and implementing a significant structural change to the auction process.  Enforcing minimum bid prices and imposing minimum clearing prices would be a major structural change to the current CRR market design, the full potential consequences of which must be fully tested, understood and communicated to stakeholders and decisionmakers prior to adoption.[1]  The CAISO has not established that CRRs that clear at or close to zero are a dire market issue or that eliminating them will be particularly effective for achieving previously identified goals, such that there is not time to fully test and analyze the impacts of the CAISO’s unprecedented proposal.    

At this point, the CAISO does not know what to reasonably expect if it imposes minimum bid and minimum clearing prices. The CAISO’s proposed timeline does not allow it or stakeholders to properly understand and consider the potential consequences of this unprecedented market structural change for financial transmission rights (FTR) obligations.[2]  The CAISO’s proposed timeline does not allow it to conduct a thorough comparative analysis, parse the results, present them to stakeholders and consider their feedback.  The CAISO itself posed many unresolved, fundamental questions regarding how minimum prices should be implemented and the possible effects.[3]  Setting minimum prices would likely not provide the benefits the CAISO assumes and would likely harm various positive aspects of the current market, including liquidity, price formation, and total auction revenue. 

It would be irresponsible for the CAISO to experiment with an unvetted new market design in the live, production environment.  Instead, the CAISO should prepare a comparative analysis to better understand the likely consequences of setting minimum prices at the various levels it has suggested along with the different possible options for how to apply the new price minimums.  For example, the CAISO should run simulated auctions using historical auction data to better understand the potential consequences of setting minimum prices at different levels, with and without rules that exempt the sale of capacity offered into auctions by CRR holders.  This comparative analysis should consider every potential price threshold and material rule variation under serious consideration, in order to better understand the comparative potential effects on the volume of CRRs awarded, clearing prices, total auction revenue, etc. 

The CAISO should explain key assumptions and test them as part of this analysis. For example, the CAISO should test assumptions regarding the amount of CRR bid volume that currently clears below each proposed minimum price threshold that will either drop out of the auction or be repriced to the proposed minimum.  The CAISO should run simulations assuming all bid volume below each potential threshold drops out of the auction, as well as simulations that assume all bid volume stays in the auction and reprices to the minimum threshold, and at least one additional scenario that tries to make more reasonable assumptions regarding the amount of bid volume that will likely drop out or be repriced to the minimum.  This type of comparative analysis may not reveal exactly what will happen upon implementation of a specific minimum price threshold (in fact, it would be unreasonable to assume all volume will drop out or all volume will be repriced to a higher minimum price), but it will better inform the CAISO, stakeholders and decisionmakers of the range of potential possibilities and relative expected outcomes of various potential proposals. 

Additionally, the CAISO should also run auction simulations to understand the consequences of breaking the symmetry between prevailing flow and counterflow CRRs and work out how the CAISO will clear the market as a practical matter.  Currently, in every US financial transmission rights market, bids to buy and offers to sell CRR capacity clear at equal and opposite prices.  The CAISO, stakeholders, and decisionmakers need to understand how a centrally clearing auction where all bids and offers compete against one another for the same networked capacity will function under the CAISO’s proposed novel conditions.  Running simulations and publishing the results is essential to avoiding unintended consequences that could result from this unique, untested experiment in market design. 

Furthermore, the CAISO needs to take the time to update its downstream processes, such as CRR data reporting and settlement systems, to make sure they function properly under a new market structure subject to minimum bid and minimum clearing prices.  Since EDAM/DAME went live on May 1, 2026, the CAISO has experienced a large number of data reporting and settlement issues.  DC Energy recognizes that the introduction of EDAM/DAME was complicated and some disruption and adjustment time is necessary. However, the CAISO should reflect on the EDAM/DAME experience and not rush the adoption and implementation of its proposed unprecedented and untested market design changes for the 2027 annual CRR auction. 

Modeling Improvements

Modeling improvements, in contrast, are appropriate for Phase I implementation.  As the CAISO has highlighted, many modeling improvements can be implemented without necessitating Tariff amendments.  A number of stakeholders have advocated for modeling improvements consistently in this initiative.  Experience indicates that improved CRR modeling would improve congestion revenue inadequacy and reduce CRR underfunding, which should reduce risk premiums, ultimately, increasing auction revenue and improving “auction efficiency”, as defined by the CAISO[4].

The addition of a peak-solar time of use (TOU) is another enhancement that would be appropriate for Phase I and is an important prerequisite to accurately model loop flows, a significant portion of which are associated with solar generation in the Southwest. A CRR model that accounts for capacity consumed by loop flow will only be accurate if it differentiates solar peak and non-solar peak hours.  Similarly, a peak-solar TOU would increase auction participant confidence, and the utility of CRRs as a hedging instrument, by better aligning expectations regarding day-ahead congestion with the CRR product definition.  Currently, a market participant that forecasts congestion during peak solar periods must account for the risk that congestion will flow in the opposite direction during other hours within the current on-peak definition and discount its bids accordingly.

In addition to modeling enhancements, the CAISO should prioritize other incremental improvements that complement ongoing modeling improvements and address the root causes of congestion revenue inadequacy in Phase I.  For example, the CAISO should pursue efforts to improve transmission outage reporting and greater transparency regarding reported outage information. Also, the CAISO could shift the release of some auctioned capacity from the annual CRR auction process to the monthly CRR auction process, when more is known regarding likely system conditions. 

In particular, the CAISO should prioritize the adoption of a lower, uniform shift factor cut-off threshold, which it has identified as a root cause of congestion revenue inadequacy and CRR settlement reversals in particular.  Rather than pursue an untested, novel market design, the CAISO should adopt a uniform shift-factor cut-off threshold consistent with the practice in other RTOs, none of which experience FTR underfunding at similar levels, let alone FTR settlement reversals.

[1] See Congestion Revenue Rights Enhancements Initiative: Straw Proposal on Auction Efficiency and Revenue Adequacy, CAISO presentation, at slide 7 (Jun. 2, 2026) (“June 2^nd Presentation”) available at https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Congestion-Reveune-Rights-Enhancements-2026-06-02.pdf (“Development of structural changes should consider their full potential risks and benefits”).

[2] We use the generalized term financial transmission rights (“FTRs”) to describe all similar markets across US ISOs, including CAISO’s CRR market.

[3] See June 2^nd Presentation, at slide 13.

[4] DC Energy does not agree that the metric of auction efficiency as defined by the CAISO is a useful single measure of CRR market efficacy. There are benefits beyond the direct economics of the CRR auction that accrue to ratepayers that this metric ignores, e.g., CRR price discovery enables pricing of congestion risk for bilateral contracts.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

The CAISO has not explained why CRR paths that clear for low auction prices are a problem that must be eliminated. 

Furthermore, the CAISO has not established that CRRs that clear at prices close to zero are a disproportionate source of the difference between total CRR auction revenue and day-ahead congestion revenue paid to CRR holders (i.e., “auction efficiency”).  Instead, the CAISO’s own analysis has shown that not only are there no paths that consistently clear CRR auctions at prices close to zero yet provide substantial congestion revenue, but, as a class, CRRs that clear close to zero do not provide their holders with outsized congestion revenues.[1]  Instead, CRRs that clear for very low prices most often settle with very low congestion revenue, indicating that, on the whole, the market’s collective assessment of very low value tends to be correct. 

The CAISO has provided no evidence that imposing minimum bid and minimum clearing prices will increase total auction revenue or increase auction revenue relative to congestion settlement paid to CRR holders (i.e., improve “auction efficiency”).

Without a clear definition of the problem and the mechanism by which the proposed solution is expected to address it, it would be difficult to gauge whether the imposition of minimum bid and minimum clearing prices is a success or failure. For instance, would the CAISO consider it to a success if they increased “auction efficiency” by substantially decreasing the amount of congestion revenue paid to CRR holders while simultaneously lowering the total amount of auction revenue paid to load?  In this scenario, the CRR market would shrink, fewer constraints would bind in the CRR auction optimization, less auction revenue would be collected, and more congestion would be allocated on a load ratio basis. Allocating congestion revenue on a load ratio basis is less efficient than allocating it through CRRs, because load ratio share does not correspond with where, when and by whom congestion was experienced in the day-ahead market.  Load-serving entities benefit from a more efficient allocation of congestion revenue when they receive it through their CRR portfolios, rather than on a load ratio basis.

What if auction revenue and congestion paid to CRR holders both decreased in relative proportion to one another, shrinking the market, reducing total auction revenue collected, allocating congestion revenue less efficiently, and also not increasing “auction efficiency”?  Would the CAISO abandon its minimum price experiment or raise the floor further?  How confident can we be that higher minimum prices will in fact improve “auction efficiency”, if we do not understand the incentives that the CAISO’s proposal may create and how they may affect bidding behavior? 

At what point would the CAISO recognize that administratively setting prices on a significant number of CRR paths is a failure?  Administratively setting prices diminishes the price discovery benefit of auctions and would result in a congestion revenue surplus that would be allocated on an inefficient load ratio basis. It would also indicate that market participants, including competitive retail suppliers, generators, project developers and power marketers, are unable to obtain CRRs at prices they are willing to pay, undermining their ability to manage congestion risk and increasing costs in the market.

The CAISO posits that a secondary market could develop to mitigate this primary market failure but there is no evidence to support this and the associated transaction costs would be higher, which would ultimately be passed on to consumers.  

CRR Capacity Sales

During the June 2^nd CAISO meeting, a large number of diverse stakeholders suggested that CRR capacity offered for sale into auctions by CRR holders should be exempt from minimum prices.  An exemption is necessary to preserve CRR holders’ ability to transact and manage their CRR portfolio risk.  CRR allocation recipients regularly offer capacity for sale in CRR auctions at their own internally-determined reservation prices. In other words, they act as willing sellers. For many load-serving entities, selling allocated capacity and reconfiguring their CRR portfolio via the auctions is essential to acquiring or sizing useful hedges.  

If minimum bid and minimum clearing prices apply to offers to sell capacity into an auction, it would stifle the ability of CRR holders to manage their CRR portfolio risk because it would hinder the sale of CRRs.  CRR holders may offer capacity for sale at or near zero because they do not value it as a hedge and/or they forecast that it will have little or no settlement value.  CRR holders also may offer capacity at or near zero because they do not wish to hold the associated settlement risk, particularly the risk that settlements could reverse and become a liability. 

If offers to sell allocated CRR capacity are exempt from minimum bid and minimum clearing prices, then sales of CRR capacity acquired in the annual auction and later sold in monthly auctions must be exempt as well.  Otherwise, the market structure would be unduly discriminatory against auction participants that did not acquire their CRRs via allocation.

Furthermore, exempting some sale offers and not others would further complicate auction clearing.  In a centrally-clearing auction for networked capacity based on simultaneous feasibility, awarded capacity on the same path must clear for the same price.  Therefore, exempting offers to sell into an auction could result in very few paths clearing at administratively set prices. It is unclear whether the CAISO would consider a minimum price construct that results in very few paths settling for administratively set prices to be a success.  Such an outcome also raises the question of why complicate the CRR market with minimum clearing prices that hardly ever apply.   

Feedback on Particular Price Levels

At this point, stakeholders do not have enough information regarding potential impacts to provide well-informed feedback on the relative merits of various proposed minimum prices.  The decision to impose minimum prices and at what level is a cost-benefit analysis and the CAISO has presented insufficient evidence to make an informed decision.  As discussed in response to Question 1, the CAISO should conduct comparative analysis and report the results to stakeholders. 

It is difficult for market participants to assess how different minimum price levels would affect the market and their participation in it because there are a number of substantial unknowns.  First, whether certain paths clear an auction as prevailing flow or counterflow is uncertain until after the auction clearing optimization.  Price floors and ceilings may at times eliminate decisive bids for allowing the market to collectively make this determination via the optimization. 

Furthermore, the idea that prevailing flow (bids to buy) and counterflow (offers to sell) may clear at asymmetrical, administratively set prices complicates every aspect of the market. The apparent plan to allow a counterflow CRR position on a path from A to B to clear at a different, administratively set price than an equivalent prevailing flow CRR from B to A adds another layer of complexity.  Stakeholders have been presented with insufficient analysis to understand the potential consequences of this market structure and how they may differ depending on minimum price thresholds.

The only thing that can be said definitively regarding the range of possible minimum prices is that a lower minimum price would be less disruptive to the current market design.  As the CAISO’s limited analysis to date confirms, lower minimum bid and clearing prices would exclude a smaller volume of bids, set administratively determined prices on fewer paths and smaller volumes of CRR capacity, and relegate less congestion revenue to inefficient load ratio allocation.  Lower minimum prices would disrupt incentives to bid competitively on fewer paths and preserve more of the price discovery function of the CRR market.

Rather than institute an untested and unprecedented new market design with minimum prices set low enough to limit its likely adverse effects, the CAISO should abandon this proposal and focus its limited resources on efforts to improve the reliability and utility of CRRs via TOU reform and efforts to reduce revenue inadequacy.  Such efforts will increase market participant confidence, spurring competition that will increase auction revenue and increase “auction efficiency”.  These are true CRR market enhancements that this stakeholder initiative was created to identify and develop.

[1] See June 2^nd Presentation, at slide 24; see also, Congestion Revenue Rights Enhancements, CAISO presentation, at slide 31 (Feb. 27, 2025), available at: https://stakeholdercenter.caiso.com/InitiativeDocuments/Presentation-Congestion-Revenue-Rights-Enhancements-Feb-27-2025.pdf.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

DC Energy supports efforts to improve the CRR model as described above in response to Question 1.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

At this point, not enough analysis has been presented to answer this question.

In general, attempting to institute prices outside of the band desired by market participants introduces counterproductive friction in any market.  Some market participants that would otherwise buy will buy less or none.  Some market participants that would otherwise sell will sell less or none.  

In the CRR context, this would mean that some market participants would be unwilling or unable to acquire congestion hedges on paths or at volumes for which they otherwise would be willing to pay some amount. Conversely, CRR holders would be unable to sell some capacity that they would prefer not to hold due to its attendant risks.

CRR auctions release residual capacity that could not otherwise be allocated, and allow CRR allocation recipients and other CRR holders to reconfigure their financial transmission rights to best match their expectation of future congestion.  Ultimately, day-ahead congestion revenue is allocated via CRRs on a path specific basis in order to match where and when congestion occurred in the day-ahead market.  Setting minimum prices would cause fewer constraints to bind in the CRR auction optimization, resulting in a greater share of congestion revenue allocated on an inefficient load ratio share.  Thus, introducing friction in the CRR market ultimately disrupts the efficient allocation of congestion revenue to the market participant that values it the most.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

The CAISO should renew its focus on enhancements to the current CRR market design that increase auction participant confidence (i.e., lower market risk premiums), increasing competition, auction revenue, and “auction efficiency.”

In today’s market, a market participant may forecast that a given On-Peak CRR path will likely experience $1.00/MWh prevailing flow settlement during peak solar hours and forecast that the same path will likely experience -$0.10/MWh counterflow congestion in other hours included in the current On-Peak definition.  Also, in today’s CAISO market, a market participant would need to account for the likelihood of significant congestion revenue underfunding on the path, which lowers the expected settlement on this path to $0.45/MWh for purposes of this example. 

If the CAISO imposed a $0.50/MWh minimum bid and minimum clearing price, a market participant that forecast the expected settlement value at $0.45/MWh would not bid on this path, despite forecasting that it will have $1.00/MWh of prevailing flow during peak solar hours.  Other market participants would behave similarly and a path with an expected value of $1.00/MWh during peak solar hours would have an administratively set price (that no one actually paid) of $0.50/MWh.  

In contrast, if the CAISO updated the CRR TOU definitions to include peak solar hours, and took measures to reduce congestion revenue inadequacy and increase the predictability of its allocation, then a market participant would bid close to the $1.00/MWh forecasted congestion value of this path.  Other market participants would also have an incentive to bid up to nearly their expected value of congestion on the same path, while others would have an incentive to offer capacity for sale in the auction on that path with a reservation price based on their expected value of congestion as well.  A generator, competitive load serving entity, or power marketer that formerly did not value this path as a hedge because it forecasted that it would likely settle for half of its expected congestion value, would bid based on its expectation of congestion on this path as well.  Thus, the best way to ensure that this CRR path clears at a price that reflects the market’s collective expectation of congestion value is to increase competition in the auction by lowering risk premiums.

Ultimately, day-ahead congestion on this individual path may be higher or lower than the market’s collective expected value of congestion at the time of the auction, but over time and across the network, greater competition would lead to more accurate prices that better reflect the value of congestion in the day-ahead market.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

While we understand CAISO’s urgency to address ongoing market challenges, we believe the proposed timeline to apply Phase 1 enhancements to the 2027 Annual CRR Auction is overly aggressive. Implementing these structural changes without comprehensive market simulation and adequate transition time introduces unnecessary operational and financial risks for market participants. We recommend extending the development timeline to ensure market readiness. 

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

We believe that implementing an artificial bid and price floor is not an effective mechanism for improving auction efficiency. Instead of allowing the market to organically find its equilibrium, a rigid floor acts as an arbitrary, "one-size-fits-all" barrier. This intervention will likely result in unreasonably high clearing prices on low-value paths, thereby distorting price discovery and severely reducing hedging efficiency for market participants. 

Rather than relying on artificial price administrative controls, CAISO should focus on improving the underlying model accuracy, which drives true auction efficiency. We suggest the following alternatives: 

• Enhance Transmission Outage Transparency: Provide market participants with clearer, more timely data regarding transmission outages during the auction period. Currently, CAISO does not publish long-term transmission outage data during the auction period. This information is critical for mapping out grid topology, and its absence directly undermines current CRR auction efficiency. 

• Reflect Realistic Outages in the SFT Model: Incorporate a more accurate representation of expected transmission outages directly into the auction's network model. Aligning the auction model with actual day-ahead market realities will naturally facilitate accurate, market-driven clearing prices and mitigate revenue inadequacy. 

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3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

We support CAISO’s continuous efforts to improve modeling accuracy, such as implementing the Global Derate Factor and refining loop flow modeling. However, we urge CAISO to ensure that these adjustments strictly reflect actual physical grid limitations rather than acting as a tool to artificially restrict transmission capacity to guarantee revenue adequacy at the expense of market liquidity. 

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

We anticipate that the introduction of artificial bid and price floors will significantly discourage market participation and dampen overall market enthusiasm. By making lower-value paths uneconomic to trade, CAISO will inadvertently drive transactional liquidity out of the auction, particularly from financial participants who inject essential volume into the market. 

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Consequently, a less active and thinly traded auction will make it much harder for asset owners and commercial participants to efficiently execute their risk management strategies, forcing entities to carry unnecessary unhedged congestion exposure. Furthermore, the combination of a rushed implementation timeline and reduced market engagement leaves trading desks with insufficient transparency and time to accurately adapt internal valuation models and risk management systems. 

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

To organically boost market liquidity and improve overall CRR auction efficiency, we encourage CAISO to consider structural enhancements that facilitate broader participation, rather than just imposing price constraints. Specifically, we recommend evaluating the following market designs: 

• Support EDAM Expansion through Market-Based Pricing: As CAISO continues to expand the Extended Day-Ahead Market (EDAM), a larger pool of hedgers and market participants will naturally enter the CRR auction. To accommodate this regional growth, the market must remain efficient by relying on open, competitive price discovery rather than artificial administrative interference. 

• Introduce Balance-of-Period  Auctions: Allow market participants to systematically adjust their CRR positions across all remaining months of the calendar year. This functionality would significantly improve ongoing buy and sell liquidity in the secondary market.  

• Expand the Bidding Source-Sink Matrix: To better manage counter-flow risks and optimize the resale function, CAISO should expand allowed bidding combinations, explicitly permitting Gen-to-Gen node pairs. Expanding these options will enhance resale efficiency, attract more diverse market participants, and foster a more robust hedging ecosystem, and result in more rational counter-flow clearing outcomes. 

In conclusion, against the backdrop of an expanding CRR and EDAM footprint, attracting more market participants and boosting market activity requires a competitive, market-driven framework free from artificial interference. True efficiency is achieved by enhancing structural flexibility, not by enforcing arbitrary price controls. 

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

PG&E would like to thank the CAISO for the opportunity to provide comments to the Straw Proposal on Auction Efficiency and Revenue Adequacy for the Congestion Revenue Rights Enhancements (CRRE) initiative. 

PG&E believes that the auction is a main driver of revenue inadequacy 

As stated in previous comments, PG&E believes that the auction is a main driver of revenue inadequacy. This is a matter that we believe needs to be addressed as soon as possible and appreciate the CAISO’s effort to do so.  

PG&E does not support rushing to add a minimum bid and price floor 

PG&E believes the current proposal for a minimum bid and price floor is a rushed answer that has not yet been fully developed to a complicated issue. To that end, this proposal is likely to have unintended negative consequences on the auction. 

The CAISO and stakeholders should continue to focus on the auction-caused revenue inadequacy 

PG&E believes the stakeholders' time is best served by focusing on long-term solutions to solve the auction-caused revenue inadequacy. As a starting point, PG&E believes DMM’s Willing Seller Auction design is a measure that warrants further investigation and discussion as a possible solution to the auction-caused revenue inadequacy.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

PG&E does not support rushing to add a minimum bid and price floor to the auction

PG&E believes that the auction is a main driver of revenue inadequacy and appreciates the CAISO’s effort to address the issue quickly. The CAISO’s proposed accelerated timeframe of a final proposal on June 30, 2026, approval at the CAISO Board of Governors meeting in July, submission to FERC immediately after the July meeting, and implementation by October (in time for the 2027 annual CRR process) leaves very little time to properly evaluate and produce a well-developed minimum bid and price floor for the auction. A rushed proposal with the complexities of the Minimum Bid and Price Floor is likely to have unintended negative consequences on the auction. Moreover, the CAISO has not produced sufficient analysis showing the potential impact that the proposal would have on the most recent auctions, which we believe is essential to properly evaluate the proposal’s potential improvement of revenue adequacy. 

The CAISO and stakeholders should continue to focus on the auction-caused revenue inadequacy

PG&E believes stakeholders' time is best served by focusing on long-term solutions to solve the auction-caused revenue inadequacy. As a starting point, PG&E believes DMM’s Willing Seller Auction design is a measure that warrants further investigation and discussion as a possible solution to the auction-caused revenue inadequacy.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

PG&E supports continuing to improve modeling to the extent the current tariff allows and making tariff changes to explicitly authorize loop flow modeling in the annual CRR process

PG&E appreciates the CAISO’s effort to address the issue of revenue inadequacy quickly. We support the CAISO’s proposal to continue improving modeling to the extent the current tariff allows and making tariff changes to explicitly authorize loop flow modeling in the annual CRR process. Accurate, transparent modeling of the system will produce the clearest outcomes for CRRs and other system needs as well as help stakeholders understand the system. While we don’t believe these are the main drivers of revenue inadequacy, they can help better align the Day-ahead model and CRR model, which should aid in resolving the issue. However, the CAISO must keep the stakeholder community apprised of the potential changes (as indicated in the straw proposal) and take careful consideration of any impacts to annual CRRs if changes are applied after the annual CRR process. 

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

Shell Energy supports a phased approach which facilitates the separation and focus of near-term improvements with longer-term structural redesigns however, we are concerned with the stated timeline for phase 1 approval and implementation. We believe that targeting the 2027 CRR cycle to implement a uniform price and clearing floor may not leave sufficient time to fully assess the potential benefits and drawbacks of such an approach and as such would support deferring the development and consideration of this concept to a later date or into phase 2 of the initiative, with plans to implement mid 2027 or for the 2028 annual process. It may be best to focus our short-term efforts on modeling and loop flow enhancements as these enhancements due to lower downside risk.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

Shell Energy appreciates the CAISO’s thoughtful approach and the depth of its supporting analysis and would be prepared to offer conditional support for this approach in Phase 2, provided that the following analytical items are addressed:

• Counterfactual auction runs which show the effect on auction efficiency, cleared MW and the count of paths rendered uneconomic relative to expected congestion value.
• Characterization of the remaining ~75% of auction volume outside of the 1,000 paths that were studied. Presumably, a minimum price/clear floor would impact these paths more significantly than it would the top 1,000.
• A sensitivity analysis of the liquidity feedback effect. As noted in the straw proposal, a minimum price/clear floor could reduce liquidity by making many paths uneconomic.

This additional analysis will help stakeholders understand the impact this policy may have on the market and their own portfolios and allow greater opportunity to uncover new design considerations.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

Shell Energy is fully supportive of improving the modeling capabilities within the simultaneous feasibility testing process as it pertains improved representation of loop flow and the application of the global derate factor. Any details the CAISO can provide on the possibility of reducing the asymmetry with 2% shift factor would be appreciated. Further, it may be insightful to see what portion of total revenue insufficiency is attributable to outages, loop flow, modeling asymmetries etc.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

Shell Energy is an LSE within the CAISO and therefore receives an allocation of CRRs through the annual process. We suspect that any improvements to revenue efficiency could reduce the pro-rata haircut on allocated CRRs across revenue inadequate paths. Implementation of a floor could reduce liquidity and may increase the value of positions auctioned off. In the event that the CAISO implements a bid/price floor without any material improvements in revenue efficiency, then entities procuring CRRs in the auction may now be subject to paying the floor while still getting a haircut, thereby extracting more from these entities in an effort to close the auction efficiency gap.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

Shell Energy appreciates the efforts of the CAISO team to draft and present this straw proposal and look forward to further development.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

The Six Cities acknowledge the CAISO’s efforts in advancing the Congestion Revenue Rights (“CRR”) Enhancements initiative but are concerned with the pace needed to achieve certain goals of Phase 1 in time for the 2027 annual CRR process, including, in particular, the push to implement the minimum price/bid framework by October 2026. The Six Cities are concerned about unanticipated impacts that could be caused by minimum prices/bids and request that the CAISO study the issue further before moving toward implementation this year. It appears that modeling enhancements and improvements to loop flow consideration in the annual CRR process may realistically be implemented more quickly, and the Six Cities do not have concerns with adoption of these changes on an expedited timeframe. 

The Six Cities also do not oppose the proposal to undertake more complex reforms as a second phase of this stakeholder process.  Regarding Phase 2, the Six Cities continue to support and urge the CAISO to consider the willing seller/willing buyer framework and the BAMx proposal to limit the CRR auction to entities that use the transmission system and have a need for hedging. The willing seller/willing buyer framework and the BAMx proposal are viable methods to meet the goals of this stakeholder process as described on page 6 of the Straw Proposal, in particular by ensuring “[f]air allocation of transmission revenues to customers paying the embedded costs of the transmission system” and enabling efficient and effective hedging, including of physical transactions. (See Straw Proposal at 6.) The willing seller/willing buyer framework and the BAMx proposal would also directly address Problem Statement No. 2 by ensuring that allocation of congestion revenues is commensurate with auction participants’ “(A) funding of the transmission system, (B) their payments for auction CRRs, and (C) other hedging value received by physical market participants.” (Id.)

Assuming that there is sufficient stakeholder support for implementation of the CAISO’s proposal for adoption of a minimum bid and price floor in Phase 1, a potential area for evaluation in Phase 2 is the ability to set different minimum price/bid floors at different constraints. This might be accomplished by finding a reasonable manner for grouping CRRs to have different floors. Another option could be to set a general rule that would lead to different price floors, such as assigning floors as a percentage of the historic congestion revenues associated with a constraint with an appropriate allowance for discounting based on risk. A further alternative could be exploration of running separate auctions for the resale of allocated CRRs and those CRRs that are sold in the auction. The complexity of these issues underscores the need for adequate time to fully develop the Phase 1 proposal for minimum price/bid floors, rather than expediting initial implementation but deferring certain potentially important design elements to Phase 2.  

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

As stated above, the Six Cities do not oppose further consideration of the minimum price and bid floor concepts, but do not support the CAISO’s push to implement a minimum price/bid floor ahead of the 2027 annual CRR process. The potential unanticipated effects of such a floor are not fully understood and could harm users of the transmission system, particularly by preventing willing sellers from being able to resell allocated CRRs below the floor price to willing buyers. A minimum price/bid floor should enable such resales before it is implemented, even if that means that implementation occurs after the 2027 annual CRR process.

The Six Cities do not support adoption of the minimum price/bid floor, especially on Phase 1’s expedited timeline, unless the resale of allocated CRRs (without any minimum price/bid floor) between willing buyers and sellers, is expressly permitted.  Although the CAISO perceives that such resales could not be implemented as part of Phase 1, the Six Cities encourage the CAISO to assess whether there may be ways to do so. For example, a data flag to exclude certain transactions from the price/bid minimum may be a relatively straightforward enhancement. The Six Cities would also be open to exploring whether it would be beneficial to exclude the resale of CRRs purchased in the auction from the minimum price/bid floor.  

If the CAISO does move forward with implementing a minimum price/bid floor by the 2027 annual CRR process, the Six Cities request the CAISO’s commitment to explore an offramp option for this implementation, including what circumstances would trigger such an offramp, and to discuss this offramp as a part of this stakeholder process.  The offramp would allow the CAISO to suspend the minimum price/bid floor in the monthly auctions if adverse consequences from the floor become apparent and severe. Such an offramp would be designed to promptly address unanticipated negative consequences to the minimum price/bid floor, if needed, without a full stakeholder or FERC process. 

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

The Six Cities support the CAISO seeking increased authority for loop flow modeling in the annual CRR process as a prudent step to ensure maximum capacity and flexibility for the future.  The Six Cities also support the CAISO seeking authority to make more midyear enhancements to the CRR processes, similar to the application of the global derate factor to contingency constraints in the CRR model, which was started in March 2026.

The Six Cities also request the CAISO further consider of enhancements to the shift factor threshold, including, given the CAISO’s statement that “the ISO's market AC powerflow optimization and timing limitations limit the ability of the ISO to adopt near term solutions” on page 9 of the Straw Proposal, whether modifying the CRR model to be closer to the fifteen-minute market model would make such an enhancement more feasible or easier to achieve.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

One anticipated impact presented by the Phase 1 enhancements and, specifically, the minimum bid/price floor proposal, is the potential for reduced auction participation, especially if the floor exceeds the expected congestion price on the paths needed for hedging.  There may be other commercial impacts that will emerge with further discussion of the proposal.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

The Six Cities agree with the proposed Governance Classification as described on pages 19-20 of the Straw Proposal.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

SCE does not object to the CAISO adopting a phased approach to policy development for CRRs, but has significant concerns with the current proposal to rush to implement a bid/price floor. The discussion at the MSC meeting made clear that the proposal is not fully developed and serious questions remain about how a bid/price floor would be implemented. In order to get the proposal approved at the July Board meeting, as the CAISO indicated would be necessary in order to implement the changes in time for the 2027 CRR auction, SCE questions whether there is sufficient time to work through the implementation issues, ensure that there are no unintended consequences, and ensure that all market participants are sufficiently understanding of the revised mechanisms. Further, given the tight time frame necessarily imposed on FERC to approve the proposal, contingency plans should be developed in case FERC approval doesn’t happen in time.  In addition, the CAISO has not provided any analysis that the proposal would reduce CRR auction revenue insufficiency without significantly decreasing the ability of market participants to hedge legitimate needs. As explained below there may be other, easier to implement, methods that might be just as effective at reducing the level of CRR auction revenue insufficiency.

Attempting to develop the implementation details for the bid/price floor will require significant amounts of work over the next few months; SCE feels that time and effort would be better spent on working on a more comprehensive solution, such as the willing buyer/willing seller proposal from DMM or potentially other options described below.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

While SCE applauds the CAISO for attempting to put forward a proposal for implementation before the 2027 CRR auction, SCE doesn’t support the current proposal. There are too many implementation details to be developed in too short a time period to ensure a successful implementation while ensuring that all potential unintended consequences are identified and removed. Further, the CAISO has provided no analysis showing that transactions that would be prevented by the bid/price floor would be transactions contributing to the CRR auction revenue insufficiency and would not be true hedging transactions.

The goals of this exercise seem to be two-fold:

• Reduce or eliminate CRR sales where the auction price is significantly below the congestion revenue that is paid out to the CRR holder, especially when those CRR holders are not purchasing the CRRs for hedging purposes but are only procuring the CRRs for financial gains at the expense of load which is paying for the transmission system.
• Not interfering with other market transactions from willing sellers and buyers who are seeking to hedge market transactions. The first category includes entities who have allocated (or auction) CRRs that they previously acquired, but which they don’t need and would prefer to sell.

The CAISO’s bid/price floor does not address either of these two goals directly. It relies on the belief that by eliminating CRRs near $0 it will eliminate CRRs which have a large CRR revenue return for very low auction outlays. This may or may not be true. Transactions at prices near zero may be that type of transaction, but they may also be true hedging of very unlikely events which normally have a zero or even negative value. As discussed at both the CRRE workshop and MSC meeting, a bid/price floor may eliminate the possibility of market participants being able to sell CRRs they have acquired but don’t need. The CAISO has not provided any information on what the impacts, in terms of CRR auction revenue sufficiency, of its proposal will be.

SCE believes that there are several other possible interim methodologies that will address the goals in the same indirect (or in one case direct) manners, but are likely both easier to implement in the short time period required and would do as good a job at addressing the goals:

• A mechanism that ensures that allocated CRRs receive full notional value and assigns any shortage of CRR revenue to auction CRRs. Only entities which are paying for the transmission system are awarded allocations and since they are funding the transmission system it seems reasonable that they are prioritized to have fully funded CRRs. Similar to the bid/price floor, such a mechanism, by reducing the value of the auction CRRs, would decrease the demand for auction CRRs and likely reduce the amount of CRRs awarded in the auction. As with the bid/price floor this proposal makes an assumption that the CRR auction transactions that would be eliminated are likely not to be those seeking to hedge actual market activity.
• Increase the Global Derate Factor. This would likely be the easiest to implement since it would only require a change to the one parameter.  This would reduce the amount of CRRs available to be awarded in the auction. Again, this is an indirect method of reducing the amount of CRRs that are awarded with significant differences between the auction price and the CRR revenue. During the MSC meeting Jim Bushnell mentioned that a possible solution might be for the auction to include less capacity.
• A variant of the previous version might be to eliminate the existing auction entirely but then increase the amount of CRRs released in the allocation. Since load pays for the transmission system they should be entitled to all CRRs. The CAISO could then institute an auction with the only supply being CRRs supplied by LSEs from their allocations. This doesn’t impact open access because all entities are still able to schedule power flows on the CAISO grid. In the OATT system entities can procure open access transmission to allow use of the grid by purchasing transmission, but this requires them to pay for it up front and the value of that “ownership” only materializes when they use the transmission grid. Even with all CRRs being allocated, that same concept exists in the CAISO because entities can build transmission and turn it over it to the CAISO in exchange for CRRs.
• Adopt the BAMX proposal that auction participants are limited to procuring the amount of CRRs that they might need for hedging, based on how much they actually used the transmission grid during the last year. This method would directly target those transactions which don’t have a basis in providing hedging for actual transactions.

As mentioned, some of these possible methods are probably easier to implement than the bid/pricing floor. Without any analysis on how effective any of the proposals are at achieving the goals it doesn’t seem possible to perform the type of cost benefit analysis that Jim Bushnell reminded us at the MSC meeting should be considered. Making a decision without analysis concerning the relative costs and benefits of the various proposals is ill-advised. SCE recommends that the CAISO and stakeholders immediately begin analysis to determine the costs and benefits of the various proposals before any decision is made. SCE is concerned about the loss of congestion revenue that should be flowing back to load, but until further analysis is presented SCE isn't convinced that the CAISO’s bid/price floor will improve the situation.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

SCE offers tentative support for the revenue adequacy enhancements, but requests further details and discussions on the proposed, and already adopted, changes. Further, more than one month’s results should be examined to determine the impact of the changes. This should include months after the start of EDAM, which may have impacts on the revenue adequacy. CAISO should schedule a special stakeholder workshop to discuss additional analysis of the previously adopted change and further explanation of the expected impacts of the proposed change to the loop flow modeling, especially considering the potential changes to congestion revenue available due to the start of EDAM and the adoption of the CRA interim mechanism.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

None at this time.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

None at this time.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

Even with the existing CRR Market’s allocation challenges and perceived auction inefficiencies, as well as its identified product definition and procedural shortcomings, The Energy Authority’s (TEA) clients that serve load in California benefit significantly from TEA’s ability to use CAISO’s current CRR market to hedge their RA energy and capacity positions. TEA must therefore assess for any proposed change whether its California load serving entity clients will benefit from them not in isolation (i.e., not looking just at estimated impacts to “auction efficiency”) but in terms of the change’s effect on those entities’ all-in costs of serving customer demand, which is heavily influenced by both long-term contracting and risk management and short-term resource and load settlement.

CAISO’s proposal to institute a bid and price floor in the CRR auction is not ready or appropriate to be included in this Phase 1 effort and should be pushed to a future phase. The concept has not been adequately developed[1], vetted with stakeholders, or tested for holistic market impacts for it to be moved to a final proposal. Any degradation in market depth and liquidity will almost certainly have a negative impact on TEA’s clients, and at this point no convincing data has been produced showing that this proposal would be a net positive for TEA’s clients or any other California LSE.

Even if this data had been presented, the window for making structural CRR market changes for the 2027 CRR cycle without risking disruptions in other areas has already closed. While it is true the bid and price floor change focuses on the annual CRR auction, which takes place in October, those changes may have a bearing on market participant expectations and choices in the annual CRR allocation, which takes place in July, and in the final annual RA contracting window, which continues through August – especially given the narrower margins in the current RA market. Given that these processes are already challenged for 2027 by uncertainty brought by DAME and EDAM, plus changing grid and program conditions, it would not be prudent to introduce additional uncertainty by adopting an untested structural market change in the middle of or after these processes have run their course.

What would be prudent, however, would be to target implementing a handful of process and product definition enhancements that would immediately have a net positive impact on the entire CRR market with limited if any risk. TEA therefore requests CAISO instead focus now on making these incremental process and modeling enhancements to the CAISO CRR market. CAISO should rescope these as “Phase 1” of what would ultimately be a multi-phase CRR enhancements initiative, while pushing other scope items to future phases.

TEA understands some of the below enhancements have not been discussed in a stakeholder meeting in this initiative, and that CAISO could choose to view them as “out of scope” for the initiative. However, each represents highly achievable improvements that should not be controversial. And each should be able to be implemented prior to (or coordinated with) the 2027 CRR cycle.

TEA therefore requests the immediate Phase 1 changes include:

Process Enhancements[2]:

• Extending the monthly market allocation window from one day to two days such that minor delays in the posting of market data will have less of a negative impact on market participant processes;
• Setting a minimum notification window for mapping updates, such as one full day prior to the monthly allocation/auction window;
• Setting a minimum notification window for any collateral, rule, or procedural changes, such as one full week prior to the monthly allocation/auction window; and
• Enhancing response time to CIDI tickets and email inquiries to better align with market deadlines.

Modeling Enhancements:

• Considering unscheduled flow impacts in the annual CRR process; and
• Committing now to maintaining the SP-Tie intertie schedule model for intertie transactions at a minimum for the entire 2027 CRR cycle (i.e., through 12/31/2027) to provide certainty to allocation and auction participants that their models will remain valid through the entire commercial period.

After implementing those changes for the 2027 cycle, and assuming CAISO is unable to complete any of these scope items in time for the 2027 cycle, CAISO should focus next on Product Definition enhancements, additional Modeling Enhancements, and additional analysis as a new “Phase 2”, including:

Product Definition Enhancements:

• Offering a Balance of Planning Period (BoPP) product;
• Extending standard on/off-peak periods to seven days per week; and
• Developing complementary sub-products within the on-peak period (e.g., solar hours, super-peak, etc., all to be further vetted through the stakeholder process.).

Analysis:

• Assessing the impact of the broad changes brought by CAISO’s new IFM/RUC products and the incorporation of EDAM TSRs in the day-ahead market solution, including modeling how EDAM onboarding in 2027 and 2028 of BAAs much more electrically tied to the CAISO BAA will impact congestion on the CAISO system; and
• Considering the extent to which targeted changes to the EDAM CRA may improve revenue adequacy across that same horizon.

Modeling Enhancements:

• Considering a global reduction in shift-factor thresholds across all CAISO markets.

It is only after completion of this work that CAISO should consider other potential long-term structural changes, including imposing a bid and price floor in the CRR auction.

TEA fully supports a Phased approach if managed in this way.

[1] Under any implementation timeline for this concept, TEA believes CalCCA’s and other stakeholders’ suggestions made during the meeting, which were also explored during the MSC call on June 11, 2026, should be considered in depth within the CAISO initiative process and tested before a final proposal is reached.

[2] See TEA’s comments submitted following the January 21, 2026, stakeholder meeting for more details.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

TEA does not oppose the concept of a bid and price floor, if properly constructed, but rather believes for the reasons stated above that it is not a concept that is ready or appropriate to be implemented at this time. TEA therefore opposes its inclusion as a scope item for Phase 1 implementation despite being open to considering it in a future phase once other work has been completed.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

See above for TEA’s recommended expanded Phase 1 scope, which includes the “revenue adequacy enhancements” CAISO described in the straw proposal.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

TEA’s recommended expanded Phase 1 scope is intended to address known inefficiencies in the CRR market processes entities experience in the CRR annual and monthly cycles, which have a negative impact on commercial market activity today. They are a barrier to expanded market liquidity and depth. And they increase both the risk and cost of leveraging the CRR market to manage supply and demand positions for load serving entities and the resource owners and marketers they contract with to ensure least-cost service for their customers. Implementing each of TEA's requested revised Phase 1 enhancements would meaningfully improve commercial outcomes with no risks or trade-offs for market participants or the CAISO.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

Across all CRR enhancements work, it is important for CAISO and stakeholders to look forward, not backward, when considering potential market changes. CAISO’s market fundamentals changed drastically on May 1, 2026, with the implementation of the new DAME products and EDAM. Any data gathered prior to that date needs to be heavily discounted in its ability to predict future market outcomes and any potential enhancements past that point need to consider the updated requirements of a materially changed market. Moreover, CAISO’s markets will continue to experience major additional shifts with each new EDAM onboarding. This is especially true for the 2027-28 classes of EDAM joiners, each of whom are much more tightly coupled to flows on the CAISO system than either PacifiCorp or Portland General. It has to be acknowledged that any structural changes to the EDAM CRA framework, which unlike the existing CRR market was established as an “interim” program, will also have an immediate and largely unpredictable impact on constraint funding in CAISO’s CRR market. Fortunately, the Phase 1 changes and revised Phase 2 changes TEA charted above are beneficial under any of these shifts in fundamentals. There are no drawbacks to them regardless where EDAM CRA policy lands, how RA programs evolve, or how EDAM flows impact the CAISO system.

TEA very much appreciates the time and effort put into this initiative and the straw proposal by CAISO staff and leadership, and the deep engagement from stakeholders during the meetings and in written comments.  

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

TransAlta Energy Marketing U.S. (TEMUS) agrees that a phased approach to changes affecting congestion revenue rights (CRRs) would be prudent, with a stepwise assessment of the impact of each change on market outcomes and the initiative’s goals as described in the December 2, 2025 Discussion Paper.

Given that the CAISO intends to implement Phase 1 changes for the 2027 annual CRR auction, and therefore requires approval by the Board in July, Phase 1 should include those changes that have broad stakeholder consensus, such as the modeling of loop flows. There was stakeholder consensus regarding this change, and the CAISO’s own analysis indicated that loop flows were a primary cause of auction revenue shortfalls. In addition, limiting Phase 1 changes would also allow a more precise analysis of the impact of changes to Extended Day-ahead Market (EDAM) congestion revenue allocation (CRA), given the significance acknowledged by the CAISO in the September 8, 2025 meeting.

There was much less consensus regarding the establishment of bid/price floors. Since this change was introduced to stakeholders in the Straw Proposal on June 1, it requires more analysis on the potential impact on auction liquidity and participation. Therefore, TEMUS recommends that this change be moved to Phase 2 to allow for more vetting and avoid unintended consequences on the upcoming auction.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

As discussed during the June 12 Market Surveillance Committee (MSC) stakeholder meeting, there is no positive cost-benefit for the CAISO’s bid and price floor proposal. In addition, questions from the MSC and stakeholders underscored that there are still several aspects of how the proposal would be operationalized that are unanswered, indicating that the CAISO’s schedule for Board approval in July is premature and the reasoning for the urgency is unclear. Thus, TEMUS  recommends moving the bid/price floor proposal to Phase 2 for further vetting and that Phase 1 includes a proposal to lower the shift factor thresholds.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

TEMUS supports the two enhancements proposed for Phase 1 on slide #31: (1) continued modeling improvements within existing tariff authority which has already begun with the application of the Global Derate Factor (GDF) to contingency constraints in the CRR model starting in March 2026, and; (2) tariff changes to explicitly authorize loop flow modeling in the annual CRR process.

However, TEMUS urges the CAISO to also include other modeling improvements that require tariff changes, including lowering the Shift Factor Thresholds (SFT). It would be prudent to have fully implemented and analyzed changes to the modeling of CRRs on the desired outcome (revenue adequacy) before moving to large design changes. The CAISO has previously presented internal analysis identifying root causes affecting CRR revenue inadequacy, justifying moving forward with both the GDF and changes to the SFTs.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

CRRs are an essential and widely used commercial tool, and for liquidity and auction participation to be maintained, Changes to the auction must result in a design in which outcomes are somewhat predictable. As was pointed out during the June MSC meeting, if participants are unable to estimate the value of a CRR at the time auction, the CRR loses all value.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

We generally support the phased approach.  As CAISO proposes, this approach allows for quick implementation of solutions that will provide near-term benefits, while allowing for longer-term consideration of more controversial proposals. We agree with the inclusion of enhanced loop flow modeling authority as this can readily reduce some existing underfunding.

We do not agree with the inclusion of a bid and price floor in Phase 1.  This proposal requires more extensive stakeholder consideration than the expedited Phase 1 allows. Discussion of this topic should not, however, derail implementation of the non-controversial loop flow authority.  CAISO could potentially split Phase 1 into Phase 1A – loop flow, and Phase 1B – bid and price floor.  This would allow Phase 1A to meet the June 30 deadline, while permitting more time for consideration of Phase 1B.

We concur with the comment from Ms. Welles of WPTF that the shift factor issue should be addressed in Phase 1. While we understand CAISO’s concern about the potential interplay between CRRs and the DA/RT market, this issue should remain a priority. Further, a number of issues have been raised in this stakeholder process and should not be lost in the shuffle.  These include:

• More frequent auction rounds;
• Update CRR1b to allocate shortfall to TSPs for late-reported outages;
• Intra-month model updates; and
• Reduce/eliminate shift factor threshold in day-ahead market.

These issues should be considered in CAISO’s phased proposal, whether in Phase 1 (A or B) or Phase 2.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

We are considering the merits of the bid and price floor, and as noted above, believe this issue needs more discussion than the expedited Phase 1 proposal permits. Overall we question whether implementing a bid and price floor will have any positive impacts on underfunding. At the same time, this proposal might distort pricing and reduce liquidity.  In balancing the equities we would like to see far more evidence of positive benefits to overcome the potential harms.

CAISO raises some good questions on slides 13, 14 and 18 about the issues and characteristics to consider in designing a bid and price floor.  These questions need more consideration and discussion.

If implementing a bid and price floor, we believe CAISO should start small, by implementing the $0.25/MWh on-peak and $0.05/MWh off-peak pair for positively priced CRRs to see whether there is a positive impact from this change.  CAISO could match the $0.05/MWh for off-peak to counterflow CRRs to prevent them from clearing at zero.  Once CAISO has six months to a year of data, CAISO and its stakeholders could revisit the issue to see how the floor has impacted the markets. CAISO acknowledged that the auction floor could be introduced as an incremental change that is adjusted over time.  If a floor is to be adopted, we believe the incremental approach makes sense.  We also agree with the comment from Ms. Colbert of Vistra noting that any floor should not apply to offers for resale of CRRs.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

We support both continued modeling improvements within existing tariff authority, and expedited tariff changes to explicitly authorize loop flow modeling.  Both of these may yield positive changes to CRR underfunding without significant negative impacts.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

Our commercial and business concerns are largely outlined above.  We are concerned that implementing the price and bid floor could result in decreased liquidity and price distortion.  It may also reduce companies’ ability to place granular and specific bids.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.

No further comments.

1. Please provide your organization’s feedback on the proposal to take a phased approach to policy development in this initiative, as described on slides 6–10 of the CAISO presentation and in the introduction of the straw proposal.

WPTF supports a phased approach to this initiative but does not support including the proposed auction bid floor and market clearing price floor in Phase 1. Phase 1 should remain focused on measures that directly address the root causes identified in CAISO’s analysis and avoid fundamental changes to CRR auction price formation or market participation incentives. WPTF does not understand why CAISO has placed an expedited timeline on this newly introduced proposal rather than continuing to advance other established enhancements.

At a minimum, consideration of minimum bid and clearing price floors should be deferred to Phase 2 and replaced with efforts to address known root causes, such as the shift-factor (SF) threshold issue. Unlike the proposed pricing floors, which represent a significant market design change, the SF threshold has already been identified by CAISO as a contributor to CRR revenue inadequacy. Other items that should be included in Phase 1 rather than the bid floor and minimum clearing price include enforcement of the outage reporting requirements, continued improvement of modeling loop flows, product definitions, and storage as an eligible sink location.

WPTF is concerned that CAISO is prioritizing a new proposal on an accelerated timeline while enhancements with demonstrated stakeholder support and measurable benefits remain unresolved. The bid and clearing price floor concept was not meaningfully discussed until the June 2 working group meeting, whereas other proposals, including product definition enhancements and allowing storage as a biddable sink location, have undergone substantially greater stakeholder review and development.

WPTF continues to urge CAISO to prioritize root-cause solutions and modeling improvements in Phase 1, or at a minimum before considering minimum bid and clearing price floors. CAISO’s own analysis identified the SF threshold as a contributor to CRR underfunding, yet CAISO has not provided a satisfactory explanation for why it is not pursuing this straightforward change with known benefits.

Importantly, the measures CAISO has identified as root-cause solutions improve both revenue adequacy and auction efficiency. These objectives are closely linked; greater confidence in CRR funding allows participants to bid based on expected congestion value rather than incorporating an underfunding risk premium. Reducing funding uncertainty therefore promotes more efficient price formation, greater participation, and stronger auction outcomes. In contrast, administrative price floors do not address the underlying causes of underfunding and may not produce lasting improvements in either revenue adequacy or auction efficiency.

WPTF remains concerned that the current Phase 1 proposal focuses on modifying auction outcomes rather than addressing the factors that create those outcomes. Given that the CRR enhancements initiative was launched in response to analysis identifying specific drivers of revenue inadequacy, including modeling limitations and SF threshold impacts, stakeholders would reasonably expect Phase 1 to prioritize those issues before considering structural market design changes.

Recent experience demonstrates the value of this approach. The application of the global derate factor (GDF) to contingency constraints, implemented in March, has contributed to improved revenue adequacy and stronger auction performance. These results show that addressing identified root causes can produce meaningful benefits without introducing significant changes to the auction framework.

Accordingly, WPTF encourages CAISO to focus Phase 1 on completing and expanding root-cause solutions, while continuing progress on time-of-use definitions and allowing storage as an eligible sink location. Only after the impacts of these corrective measures have been evaluated should CAISO consider whether additional structural reforms, such as minimum bid and clearing price floors, are necessary.

2. Please provide your organization’s feedback on the Phase 1 proposal to institute a bid and price floor in the CRR auction, as described on slides 11–28 of the CAISO presentation and in Section 4.3 of the straw proposal.

Please include any comments on which of the options shown on slide 28, or other floor levels not presented, is most appropriate and why.

WPTF does not support moving forward with the proposed minimum bid and market clearing price floors in Phase 1.

Although WPTF generally supports timely progress on stakeholder initiatives, CAISO has proposed an unusually accelerated timeline for a concept that would significantly change CRR auction price formation and participant behavior. WPTF cannot recall another initiative moving from a straw proposal to Board consideration in approximately two months. The June 2 working group was the first substantive discussion of this concept, yet stakeholders are being asked to evaluate it on a schedule that could result in Board consideration only months after its introduction and with only one opportunity to provide feedback prior to the final proposal.

WPTF is not aware of stakeholder requests for this expedited timeline and believes additional analysis and engagement are necessary before CAISO seeks policy approval. The proposal remains conceptual. CAISO has not provided simulations or robust analysis of its impacts, several fundamental design questions remain unresolved, and additional market impacts may yet to be identified.

The proposal would fundamentally change how CRR auctions clear and how participants value and transact CRRs. Such changes require a robust stakeholder process supported by detailed quantitative analysis, discussion of implementation mechanics, and evaluation of unintended consequences. At a minimum, CAISO should provide comprehensive simulations showing how historical CRR auctions would have cleared under the proposed framework, including sensitivities across a range of bid floor and clearing price floor levels. Simulations are also necessary to show exactly how this would be implemented and identify if there are other impacts that need to be considered.

WPTF requests that CAISO publish a multi-year back-cast analysis evaluating impacts on auction efficiency, revenue adequacy, CRR awards, congestion rent collection, CRR holder revenues, and net revenues returned to load. Without this information, stakeholders cannot reasonably assess whether the proposal will achieve its objectives or understand potential consequences, such as limiting participants’ ability to sell previously acquired CRRs.

WPTF also notes that minimum bid and clearing price floors address the symptoms of CRR underperformance rather than the underlying causes. A price floor does not increase congestion rents, improve network modeling, reduce shift-factor threshold impacts, or increase the funding available to support CRRs. Instead, it administratively alters auction outcomes without necessarily improving the underlying economics that should drive revenue adequacy and auction price formation.

If the proposal discourages participation, reduces liquidity, or prevents transactions at economically efficient prices, it could reduce auction revenues and impair price discovery, contrary to CAISO’s stated objectives. CAISO should first exhaust opportunities to address identified root causes before pursuing interventions that alter auction price formation.

Several critical design questions also remain unresolved, including:

• How CAISO would mathematically implement the minimum clearing price within the auction optimization;
• How CAISO would distinguish prevailing-flow and counterflow CRRs for purposes of applying positive or negative floors;
• How the proposal would affect other ongoing initiatives, including proposals relying more heavily on the CRR simultaneous feasibility test; and
• How the proposal would interact with participants’ ability to liquidate or reconfigure existing CRR positions.

WPTF is particularly concerned that the proposal could impair participants’ ability to sell CRRs at prices they deem appropriate based on their own risk management needs. Market participants, including LSEs, use auction transactions to reconfigure portfolios or dispose of CRRs. Participants should retain the ability to determine the price at which they are willing to sell a CRR. A minimum price restriction could leave entities holding unwanted positions and reduce the flexibility that is central to the CRR auction framework.

WPTF is also concerned that CAISO has not established a clear analytical basis for selecting the bid floor or clearing price floor. During the June 2 working group, CAISO suggested that an initial floor could be implemented and later adjusted based on observed outcomes. WPTF does not believe that approach is appropriate for a market design change of this magnitude. CRR auction changes generally occur on an annual cycle and directly affect participant risk management, portfolio valuation, and commercial outcomes. An improperly calibrated floor could therefore remain in place for an extended period before corrective action could be taken.

Because CRR auctions support real commercial transactions and financial risk management decisions, stakeholders must have confidence that any changes have been thoroughly evaluated before implementation. WPTF does not support using the production market as the primary mechanism for determining whether proposed floor levels are appropriately calibrated.

For these reasons, WPTF believes CAISO should defer consideration of bid and clearing price floors to a later phase, after a more comprehensive analysis and stakeholder process and after identified root-cause solutions have been fully evaluated.

3. Please provide your organization’s feedback on the proposed Phase 1 revenue adequacy enhancements, as described on slide 31 of the CAISO presentation and in Section 4.3 of the straw proposal.

WPTF supports CAISO continuing to pursue modeling enhancements that improve alignment between the CRR model and Day-Ahead Market outcomes. The recent improvements, namely the application of the GDF more broadly, in CRR market performance demonstrate that targeted efforts addressing identified root causes can meaningfully improve both revenue adequacy and auction efficiency.

WPTF supports CAISO continuing to implement modeling improvements within existing tariff authority and evaluating tariff changes that would further improve modeling, including enhanced treatment of loop flows where appropriate. WPTF also encourages CAISO to ensure compliance with outage reporting requirements adopted through prior CRR enhancements, as accurate outage information remains important to maintaining consistency between CRR and Day-Ahead Market outcomes.

Lastly, WPTF continues to believe that reducing the shift-factor threshold should remain a priority. Unlike the proposed bid and clearing price floor, addressing the shift-factor threshold directly targets one of the root causes identified through CAISO’s own analysis and has the potential to improve both revenue adequacy and auction efficiency by reducing underfunding risk and improving market confidence in CRR funding outcomes. We respectfully request that the CAISO evaluate the benefits of reducing the SF threshold to various levels.

Taken together, these measures represent targeted solutions that directly address the drivers of CRR underfunding and should therefore be prioritized ahead of broader structural changes to auction price formation.

4. Please provide your organization's perspective on any potential commercial business impacts of the proposed Phase 1 enhancements.

Given the current level of proposal detail, it is difficult for stakeholders to meaningfully assess the potential commercial impacts of the proposed bid floor and market clearing price floor. The proposal lacks sufficient quantitative analysis regarding expected impacts on auction outcomes, participation levels, CRR valuations, revenues generated to fund CRRs, and revenue returned to load.

Potential commercial impacts could be significant depending on how the floor is implemented and calibrated. For example, the proposal could affect participants’ ability to efficiently transact CRRs, reconfigure portfolios, manage congestion risk, and monetize allocated positions. However, without detailed simulation results and supporting analysis, stakeholders are unable to evaluate either the magnitude or direction of these potential impacts with confidence.

WPTF therefore encourages CAISO to provide additional quantitative analysis before stakeholders are asked to support a specific policy direction.

5. Please provide any additional comments or feedback on the straw proposal and the June 2, 2026 working group discussion.